Governing Law for TAN

• The statutory provision for TAN (Tax Deduction and Collection Account Number) is covered under Section 203A of the Income Tax Act, 1961.
  
• This section mandates that every person responsible for deducting or collecting tax at source must obtain a TAN before making such deductions or collections.
  

Obligation to Obtain TAN

• According to Section 203A:
  
  • Any person (individual, company, firm, government, trust, etc.) who is liable to deduct or collect tax under the Act is required to apply for and obtain TAN.
    
  • The application must be made in the prescribed format and submitted to the prescribed authority.
    

Quoting TAN in Tax Documents

• Once allotted, the deductor or collector is required to quote TAN in all relevant tax documents, including:
  
  • TDS and TCS returns (Forms 24Q, 26Q, 27Q, 27EQ)
    
  • TDS challans (Challan 281)
    
  • TDS certificates (Form 16/16A)
    
  • Correspondence with the Income Tax Department
    

Penalty for Non-Compliance

• Section 272BB of the Income Tax Act prescribes a penalty of ₹10,000 for:
  
  • Failing to obtain TAN when required
    
  • Failing to quote TAN in prescribed documents
    
• The penalty is levied by the Assessing Officer and is independent of other consequences like interest or disallowance of expenses.
  

Supporting Rules and Forms

• The rules for TAN application and management are further detailed in the Income Tax Rules, 1962, particularly Rule 114A.
  

The application for TAN must be made using Form 49B, and changes or surrender of TAN can be made through specified correction or surrender forms.