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What is the review period of TAN usage?

No Fixed Legal Review Period

  • There is no explicitly defined legal “review period” for TAN usage under the Income Tax Act.
  • However, TAN-related compliance is generally **reviewed on a quarterly and annual basis during audits, return filings, and regulatory checks.

Quarterly Compliance Reviews

  • TAN holders are required to file quarterly TDS/TCS returns (Form 24Q, 26Q, 27Q, 27EQ).
  • Each quarter acts as a compliance review window, where tax deductions, challans, and filings are checked for:
    • Timely deduction and deposit
    • Correct TAN usage
    • Proper PAN linkage and section-wise reporting

Annual Statutory Audit Review

  • During the statutory audit, auditors examine TAN usage as part of Clause 34 of Form 3CD in the tax audit report.
  • This includes:
    • Verification of the TAN’s validity
    • Cross-checking all deductions and payments made under TAN
    • Identifying defaults or delays in TDS returns and tax remittances

Income Tax Assessments and Scrutiny

  • TAN records may be reviewed by the Income Tax Department during scrutiny assessments, survey proceedings, or compliance notices.
  • The review typically spans the past one or more financial years, depending on the scope of inquiry.

Internal Periodic Reviews

  • Responsible businesses conduct monthly or quarterly internal reviews of TDS activity under TAN.
  • These reviews include:
    • Reconciliation of books with Form 26AS and TRACES data
    • Verification of challans and TDS certificates issued
    • Monitoring defaults or mismatches

Records Retention Period

  • Though TAN is permanent, its associated TDS records and filings must be preserved for at least 6 to 8 years.
  • This is crucial for audits, legal proceedings, or responding to inquiries from the tax department.

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