- Meaning of TAN
- Persons liable to apply for TAN
- Relevance of TAN
- TCS statements i.e. return
- Challans for payment of TCS
- TCS certificates
- Other documents as may be prescribed
- Penalty
- Procedure to obtain TAN
- Charges for obtaining a TAN
Meaning of TAN
Tax Collection Account Number is a 10-digit alphanumeric number issued by the Income-tax Department (herein after referred to as ‘TAN’). TAN is required to be obtained by all persons who are responsible for collection of tax at source (‘TCS’).
Given below is an illustrative TAN:
DELM12345L
First 3 alphabets of TAN represent the jurisdiction code, 4th alphabet is the initial of the name of the TAN holder. The next 5 digits of TAN are system generated numbers between 00001 to 99999 and last character, i.e., the tenth character is an alphabetic check digit.
Persons liable to apply for TAN
Every person who is liable to collect tax at source is required to obtain TAN.
Relevance of TAN
It is mandatory to quote TAN in following documents:
Penalty
If a person fails to apply for TAN or failed to quote or quotes incorrect TAN in the above specified documents, a penalty of Rs. 10,000 shall be levied.
Procedure to obtain TAN
An application for allotment of TAN shall be made in duplicate in Form No. 49B at any TIN Facilitation Centers (TIN-FC). Addresses of TIN-FCs are available at NSDL-TIN website. Alternatively, one can apply for TAN online at the NSDL-TIN website.
Charges for obtaining a TAN
A fee of Rs. 65 (Rs. 55 application charge + 18% GST) should be paid as processing fee while submitting application for TAN.
- Due date for deposit of TCS to the credit of Central Government
- In case tax is collected by an office of the Government:
- Where tax is paid without production of an income-tax challan, on the same day when tax is collected.
- Where payment of tax is accompanied by an income-tax challan, on or before 7 days from the end of the month in which tax is collected.
- In case tax is collected by non-government persons, within one week from the last day of the month in which tax is collected.
- Mode of deposit TCS
- E-Payment: E-Payment is mandatory for:
- All the corporate assesses;
- All assesses (other than company) to whom provisions of section 44AB of the Income Tax Act, 1961 are applicable.
- Physical Mode: By furnishing the Challan No. 281 in the authorized bank branch
- Consequences if default is made in payment of TCS
- Levy of interest: If the person responsible for collecting tax at source does not collect it or after collecting fails to pay it to the Government, he shall be liable to pay simple interest
- At the rate of 1% per month or part thereof on the amount of such tax from the date on which such tax was collectible to the date on which the tax is collected; and
- At the rate of 1.5% per month or part thereof on the amount of such tax from the date on which such tax was collected to the date on which such tax is actually paid.
- Note: Such interest shall be paid before furnishing the quarterly statement for each quarter.
- Levy of Penalty: If any person fails to collect the whole or any part of the tax, then such person shall be liable to pay by way of penalty under Section 271CA, a sum equal to the amount of tax which such person failed to collect.
- Prosecution: If a person fails to pay to the credit of the Central Government the tax collected by him he shall be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to seven years and with fine.
Due date for deposit of TCS to the credit of Central Government:
Tax collected at source shall be deposited to the credit of Central Government in accordance with the following provisions:
Mode of deposit TCS:
Taxes collected at source shall be deposited to the credit of the Central Government in following modes:
Note:
When tax is collected by government office, it can remit the amount to the Central Government without production of an Income-tax challan and by making only book adjustment. In such a case, it has to furnish Form No. 24G to NSDL with prescribed time-limit.
Consequences if default is made in payment of TCS
A collector would face the following consequences if he fails to collect TCS or after collecting the same fails to deposit it to the credit of Central Government’s account:
- Category-1
- Category-2
- Category-3
- Wristwatches
- Art items such as antiques, paintings, and sculptures
- Collectibles, including coins and stamps
- Yachts, rowing boats, canoes, and helicopters
- Sunglasses
- Handbags and purses
- Pair of shoes
- Sportswear and equipment like golf kits or ski wear
- Home theatre systems
- Horses used for racing or polo
- Category-4
- Category-5
- Category-6
Category-1
Every person, being a seller, shall at the time of debiting the amount payable by the buyer to the account of the buyer or at the time of receipt of such amount from the said buyer, whichever is earlier, collect from the buyer of any goods of the nature specified in column (1) of the Table below, a sum equal to the percentage, specified in the corresponding entry in column (2) of the said Table, of such amount as income-tax:
| Nature of Goods | Rate (in %) |
| Alcoholic liquor for human consumption | 1 |
| Tendu leaves | 5 |
| Timber or any other forest produce (not being tendu leaves)] obtained under a forest lease | 2 |
| Timber obtained by any mode other than a forest lease | 2 |
| Timber obtained by any mode other than a forest lease | 2 |
| Scrap | 1 |
| Minerals, being coal or lignite or iron ore | 1 |
Category-2
Every person, who grants a lease or a licence or enters into a contract or otherwise transfers any right or interest either in whole or in part in any parking lot or toll plaza or mine or quarry, to another person, other than a public sector company (hereafter in this section referred to as "licensee or lessee" ) for the use of such parking lot or toll plaza or mine or quarry for the purpose of business shall, at the time of debiting the amount payable by the licensee or lessee to the account of the licensee or lessee or at the time of receipt of such amount from the licensee or lessee, whichever is earlier, collect from the licensee or lessee of any such licence, contract or lease of the nature specified in column (2) of the Table below, a sum equal to the percentage, specified in the corresponding entry in column (3) of the said Table, of such amount as income-tax:
| Nature of contract or licence or lease, etc. | Rate (in %) |
| Parking lot | 2 |
| Toll plaza | 2 |
| Mining and Quarrying | 2 |
Category-3
Every person, being a seller, who receives any amount as consideration for sale of a motor vehicle or any other notified goods (effective from 01-01-2025) of the value exceeding Rs. 10,00,000, shall, at the time of receipt of such amount, collect from the buyer, a sum equal to 1% of the sale consideration as income-tax.
Note: The Central Board of Direct Taxes (CBDT) has notified the following 10 goods, which shall be subject to 1% TCS under section 206C(1F) effective from 22-04-2025. [Notification No. 36/2025]
Category-4
Every person, being a authorised dealer, shall collect tax at the rate of 5% from the remittance under the Liberalized Remittance Scheme of the RBI:
Notes:
(a) No TCS is required if amount of remittance doesn’t exceed Rs. 10 lakhs.
(b) Where the amount is remitted for any purpose other than education or medical treatment, the tax shall be collected at the rate of 20% of amount remitted in excess of Rs. 10 lakh.
Category-5
Every person, being a seller of an overseas tour programme package, shall collect tax at the rate of the rate of 5% on payments up to Rs. 10 lakhs and amounts exceeding Rs. 10 lakhs will be subject to 20% TCS.
Category-6
Every person, being a seller who receives any amount as consideration for sale of any goods, shall collect tax at the rate of 0.1% if the aggregate value of such sale in any previous year exceeds Rs. 50 lakh.
Note: this provision is not applicable w.e.f. 01-04-2025.
Collection of Tax at Higher Rate for non-filers of Return**
The Finance Act, 2021 has inserted a new section 206CCA for collection of tax at higher rate if collectee failed to furnish return for specified period. This provision shall apply and the tax shall be collected at the higher rates prescribed under this provision if the following conditions are satisfied:
a) The collectee has not furnished the return of income for the assessment years relevant to the previous years immediately prior to the previous year in which tax is required to be collected;
b) The due date to file such return of income, as prescribed under Section 139(1), has expired; and
c) The aggregate amount of tax deducted and collected at source is Rs. 50,000 or more in said previous year.
The tax shall be collected at the higher of the following rates:
(a) Twice the rate specified in the relevant provision of the Act; or
(b) 5%.
Note 1: The provisions of section 206CCA doesn’t apply to:
a) A non-resident who does not have a PE in India.
b) A person who is not required to furnish the return of income for the assessment year relevant to the said previous year and is notified by the Central Government.
Note 3: If both the provisions of section 206CC and section 206CCA are applicable, that is, collectee has neither furnished his PAN to the collector nor has he furnished his return of income for the specified period, the tax shall be collected at the rates provided in section 206CC or section 206CCA, whichever is higher
** The provisions of section 206CCA are omitted w.e.f. 01-04-2025
- Person liable to furnish TCS statement
- Form for filing TCS statements
- Due date of filing of TCS statements
- Furnishing of TCS statement electronically
- Furnishing the statement electronically under digital signature; or
- Furnishing the statement electronically along with the verification of the statement in Form 27A or verified through an electronic process.
Person liable to furnish TCS statement
Every person responsible for collection of tax at source shall be required to furnish quarterly statements in respect thereof.
Form for filing TCS statements
Quarterly TCS statements shall be furnished in Form No. 27EQ
Due date of filing of TCS statements
The due dates for filing quarterly TCS statements are as follows:-
| Quarter ending of the financial year | Due Dates |
| 30th June | 15th July of the financial year |
| 30th September | 15th October of the financial year |
| 31st December | 15th January of the financial year |
| 31st March | 15th May of the financial year immediately following the financial year in which collection is made. |
Note: The correction statement of TCS shall be filed within 6 years from the end of the financial year in which TCS statement is required to be furnished. (Applicable with effect from 01-04-2025)
Furnishing of TCS statement electronically
The quarterly TCS statement shall be furnished electronically in any of the following mode:
Appeals
Income tax liability is determined by the Assessing Officer first. A tax payer aggrieved by various actions of Assessing Officer can appeal before Commissioner of Income Tax (Appeals). Further appeal can be preferred before the Income Tax Appellate Tribunal. On substantial question of law, further appeal can be filed before the High Court and even to the Supreme Court. Various appellate procedures at different levels of appellate authority are defined hereunder: