How to Register and Activate TAN on Income Tax Portal

TAN (Tax Deduction and Collection Account Number) is a 10-digit alphanumeric number issued by the Income Tax Department. Every person deducting TDS or collecting TCS must obtain a TAN. Once you obtain a TAN, you must register it on TRACES and the income tax e-filing portal. After registering it, you need to activate it before using it to file TDS/TCS returns or proceed to 'e-pay' taxes. Keep reading further to understand the process of registering and activating TAN on the income tax e-filing portal. 

What is a TAN?

TAN stands for tax deduction and collection account number. It is a 10-digit alphanumeric number issued by the Income Tax Department. An individual who is responsible for deducting TDS or collecting TCS is required to obtain a TAN mandatorily. Also, someone who needs to quote TAN in TDS/TCS returns, certificates, and notices related to TDS/TCS returns must obtain a TAN. 

What Documents are Required for TAN Registration?

Ensure that all the required documents and information are in order before starting the TAN registration process. The table below lists all the required documents based on the entity type:

Make sure to submit all the required documents. Submitting incomplete information or mismatched details can trigger registration failures and delays. Once you have all the documents, you can then start the registration process. Let's see the process to register TAN on the Income Tax Portal. 

How to Register TAN on the Income Tax Portal?

Before registering TAN on the income tax portal, ensure that you have an active and valid TAN. Also, ensure that the PAN of the principal contact is registered on the e-filing portal. Follow the steps below to complete TAN registration on the income tax portal:

• Step 1: Visit the income tax e-filing portal and click on the 'Register' button.
• Step 2: Choose the 'Others' options. From the dropdown menu, select ' Tax deductor and collector'.
• Step 3: Enter TAN and click on 'Validate.'
• Step 4: Now, there can be two situations
  • Situation 1: On the TRACES website, a valid TAN is registered, and a registration request has also been made on the e-filing portal:
    • In this situation, click on 'Continue,' and you can see all your pre-filled basic details. 
    • Check whether all the details are correct and then click on 'Continue'. 
  • Situation 2: On the TRACES website, a valid TAN is not registered, and no registration request has been made on the e-filing portal:
    • In this situation, register your TAN on the TRACES website. You will be redirected to the e-filing portal upon successful registration.
    • Enter all the basic details like name, PAN, birth date, and click on 'Continue'. 
• Step 5: Fill in all the details accurately, including primary mobile number, postal address, and email ID. Then, click on 'Continue'. 
• Step 6: You will recieve two separate OTPs. One on your primary mobile number and the second on your email ID that you enter. Enter both the OTPs and click on 'Continue'.
• Step 7: Next, review all the details and, if required, edit any errors. Then, click on 'Confirm'.
• Step 8: Now set a password and enter it in both the set password and confirm password textboxes. After that, set your personalized message and click on 'Register'. 

You will see a success message along with a transaction ID on the screen. Ensure to keep a note of the transaction ID for future reference. Once you receive approval from the competent authority, your registration process is complete.

After registering the TAN, the next step is to activate it on the same portal before using it. Let's see how you can activate TAN on the e-filing portal

How to Activate TAN User ID on the Income Tax Portal?

While trying to log in with your TAN on the income tax portal, you may face an error. The screen may display ' the e-filing account associated with the above user ID has not been activated, kindly activate your user ID to log in to the e-filing portal'. Now, to avoid facing this issue, follow the steps below to activate the TAN user ID:

• Step 1: Log in to your account using PAN
• Step 2: Find the pending actions tab and click on 'Worklist'. You can find the pending actions section on the dashboard. 
• Step 3: Choose 'Approval/modification of TAN deductor or collector registration,' and approve the section.
• Step 4: You will recieve a success message along with a transaction ID upon successful registration. 

Ensure to make a note of the transaction ID for future reference. After this, you can log in using your TAN and password and proceed to 'e-pay' taxes. Moreover, only registering the TAN is not sufficient. Any organization or individual needs to activate their TAN to ensure compliance. Let's understand some of the key reasons why activating a TAN is important. 

Why is TAN Activation Important?

An inactive TAN can create serious compliance issues that may attract financial and legal consequences. Here are some reasons why TAN activation is important:

• Mandatory for Filing TDS/TCS Returns 

You cannot file quarterly TDS returns without an activated TAN. Also, under Section 234E, not filing a return within the deadline can attract a mandatory late filing fee of ₹200/day. 

• Allows e-pay Tax for TDS Deposits 

The collected TDS must be deposited with the government by the 7th of each month or by the 30th of April (for March deductions). To make these payments on the e-pay tax facility, you need an active TAN. Under Section 201(1A), a delayed deposit can attract an interest at 1.5% per month. 

• Mandatory to Issue Form 16/16A

An active TAN is required to generate and download TDS certificates, Form 16, and Form 16A from the TRACES portal. The employees and vendors cannot claim TDS credits in their ITR without a TAN. 

• Prevent Prosecution Under Section 276B

Under Section 276B, failing to deduct or deposit TDS can lead to prosecution. It can result in strict imprisonment of 3 months to 7 years, plus a fine. 

• Safeguards Deductees' Tax Credits

The deductee's Form 26AS will not reflect the credit if you deduct TDS but don't file the returns due to an inactive TAN. It will directly impact the employees, contractors, and vendors as they cannot claim it in their ITR. 

• Allows Challan Correction & Access to the TRACES

Any errors in deposited challans can create compliance issues over time. To make corrections in the deposited challans, you need access to the TRACES portal. An active TAN is required to use the TRACES portal. 

In short, TAN activation is required and mandatory for various reasons. However, while completing the TAN activation process, you may face some issues. Let's check what are the issues you may encounter during the TAN activation process. 

What are the Common Issues During TAN Activation?

You might follow the correct steps, but you may still face some issues during the TAN registration or activation process. The table below lists the common issues/errors, their root causes, and ways to resolve them: 

In case you are unable to resolve the issues through the steps above or if the issue continues beyond 72 hours, file a complaint through the portal's grievance section. 

The Bottom Line

Registering and activating your TAN is an important two-step process. You must first register the TAN under the tax deductor and collector category. After that, activate the TAN by logging in using your PAN to approve the activation. Once approved, you can log in with your TAN and password to 'e-pay' taxes. 

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