TAN Registration is a ten-digit alphanumeric code which is mandatory for proprietors only, as they are liable for Tax Deduction at Source (TDS) and Tax Collection at Source (TCS) at the behest of the government. This unique ten-digit code is disclosed while filing TDS and / or TCS return, collected by respective proprietors at the time of depositing salary, payment to contractors and other expenses. It is to be noted that TAN Registration is not required by salary-class individuals.
As per the provision issued by Income Tax Department (ITD) under Section 203-A, entities collecting TDS and / or TCS on behalf of the government are bound to file the return on every quarter of the year along with TDS and / or TCS Payment Challans. One necessarily needs TAN in order to file the return. Also, missing on any compliance of the guidelines under Section 203-A will lead to a penalty of INR 10,000/-.