Every deductor is required to obtain a unique identification number called TAN (Tax Deduction Account Number) which is a ten digit alpha numeric number. This number has to be quoted by the deductor in every correspondence related to TDS.
As per Section 203A of the Income Tax Act 1961, it is mandatory for all asseesee’s liable to deduct TDS to quote this TAN Number in all communications regarding TDS with the Income Tax Department and failure to do so attracts a penalty of Rs. 10,000. TDS Returns and Payments would not be received if TAN No. is not quoted.
Tax deduction Account Number (TAN) of the Employer or Bank is the unique identifier for matching TDS claims made against TDS reported by Employers or Banks. The TAN number is mentioned on the Form 16.
In case the TAN of the Employer or Bank is not correctly mentioned, no matching is possible and TDS credit will not be given. The correct structure of TAN is mentioned below.