TAN Number is a 10 Digit Alphanumeric Number abbreviation used for Tax Deduction and Collection Account Number. Every Assessee liable to deduct TDS is required to apply for TAN and shall quote this number in all TDS Returns, TDS payments and any other communications regarding TDS with Income Tax Department.
Failure to do so may attract a heavy penalty of up to Rs.10,000. TDS Returns and Payments will not be received by the Banks if TAN is not quoted.
Salaried Individuals are not required to deduct tax at source. However, individuals who run a proprietorship business are required to deduct tax at source. All other entities like LLP, Private Limited Company, Limited Company, Trust, Society, etc., are required to obtain TAN and deduct tax at source.
To obtain TAN, an application must be made in Form 49B along with copy of PAN and address proof like Aadhaar card etc.
If tax registration is not obtained then a penalty Rs 5000 Rs. 200 a day, whichever is higher may be attracted.