TAN – Tax deduction Account Number
Tax deduction Account Number is a 10 digit alpha numeric number allotted by the Income Tax Department in India. It is allotted to all those individuals or firms, who are required to deduct tax at the source of income. After deducting the tax, TAN is mentioned and the money is deposited into Government’s Account. An Assessee cannot obtain a Tax deduction Account Number without having a Permanent Account Number (PAN).
Structure of a Tax deduction Account Number : CCCC77777C
First four characters are letters, next 5 numbers and last character is again a letter.
Why is it needed
In India, The provisions of section 203A of the Income tax Act says : no one is allowed to deduct tax at source and collect the same from another person or a group without quoting this number. It is compulsory to quote TAN in TDS/TCS return, payment challan and certificates.