Each digit of Tax Deduction and Collection Account Number represents different aspects. TAN is an alphanumeric number in which first four digits are alphabets, the next five digits are numeric and an alphabet at the last.
First three alphabets of Tax Deduction/Collection Account Number represent the code of jurisdiction; forth alphabet represents the TAN holders name with the initial letter of name. TAN holder can be individual, firm, company etc. The last alphabet is a random one. For an instance, TAN number allotted to Mr. Atul of Bangalore may look like BLR A 23456 M
Under the provisions of Section 203A of the Income Tax Act, 1961, it’s mandatory for every TAX deductor to mention the TAN number in all the below documents. If TAN is not quoted, payments of TDS/TCS will not be accepted by banks. Refund of TDS will also not be made if the TAN is quoted.
- TCS Statements
- TDS Statements
- Annual Information Return
- TDS/TCS Certificates
- TDS/TCS payment Challan
- Other prescribed documents
As per the provisions of Section 203 A of the Income Tax Act, the one who deducts or collects tax at source needs to apply for the allotment of Tax Deduction/Collection Number. If the person fails to apply for TAN or any non-compliance to the rules specified as per Section, penalty of Rs. 10,000 has to be paid.