Income-tax law | Historical provision and current position

Section 206CA of the Income-tax Act, 1961: Tax Collection Account Number

Section 206CA formerly governed the allotment and quotation of a tax collection account number for persons collecting tax at source (TCS). The provision ceased to apply from 1 October 2004. The later combined tax deduction and collection account number (TAN) framework appeared in section 203A of the Income-tax Act, 1961. For the law effective from 1 April 2026, the relevant provision is section 397 of the Income-tax Act, 2025.

Important legal status: Section 206CA is retained here for historical reference. It has not imposed a current, standalone obligation to obtain a separate tax collection account number since 1 October 2004. For current compliance, refer to the Income-tax Act, 2025 and applicable rules.

1. Meaning and purpose of section 206CA

Tax collected at source (TCS) is tax that a specified seller or collector is required to collect from a buyer or other person in transactions covered by the applicable income-tax legislation. A tax collection account number was the identifying number used by a collector for prescribed TCS payments, certificates, returns and records under the former section 206CA.

2. Historical provisions of section 206CA

Sub-section (1): Application for an account number

A person collecting tax under section 206C was required to apply to the Assessing Officer for allotment of a tax collection account number within the prescribed time.

Sub-section (2): Documents in which the number was quoted

Once allotted, the collector was required to quote the number in:

Clause (a): challans for payment of sums under section 206C(3);
Clause (b): certificates furnished under section 206C(5);
Clause (c): returns furnished under section 206C(5A) or 206C(5B) to an income-tax authority; and
Clause (d): other prescribed documents relating to the transactions in the interest of revenue.

Proviso: End of applicability

The proviso expressly stated that section 206CA would not apply on or after 1 October 2004. This date is essential when interpreting the historical wording.

3. Legislative history

Section 206CA was inserted by section 91 of the Finance Act, 2002 (Act 20 of 2002), effective 1 June 2002. The proviso ending its application was inserted by section 51 of the Finance (No. 2) Act, 2004 (Act 23 of 2004), effective 1 October 2004. The earlier official text also refers to rule 114AA and Form 49B.

4. TAN under section 203A of the Income-tax Act, 1961

From 1 October 2004, section 203A provided a unified Tax Deduction and Collection Account Number (TAN) for persons required to deduct tax at source (TDS) or collect tax at source (TCS), subject to statutory exceptions. It required eligible persons to obtain the number and quote it in relevant challans, certificates, statements and other prescribed documents. This provision is relevant to compliance and transactions governed by the 1961 Act.

5. Current framework under section 397 of the Income-tax Act, 2025

The Income-tax Act, 2025 came into force generally on 1 April 2026. Section 397(1) deals with compliance and reporting by persons deducting or collecting tax. In particular, it requires a person who has not already been allotted a TAN to apply within the prescribed time, and requires quotation of the number in specified challans, statements, certificates and other prescribed documents. Section 397(1)(c) provides exceptions to the application requirement for identified categories and notified persons.

Whether a particular transaction attracts TDS or TCS, and whether a TAN application exception applies, must be determined from the relevant provisions and rules in force for that transaction.

6. Practical guidance for tax collectors

Identify the applicable charging, deduction or collection provision and the relevant tax period.
Check whether the person must obtain a TAN or qualifies for a statutory exception.
Quote the allotted TAN correctly in applicable tax payment challans, certificates and statements.
Verify the TAN through the official Income Tax Department service.
For older matters, distinguish the historical operation of section 206CA from the later section 203A regime.

7. Frequently asked questions

Is section 206CA still applicable?

No. Its own proviso ended its applicability from 1 October 2004. It remains useful for understanding historical TCS compliance.

What is a TAN?

TAN means Tax Deduction and Collection Account Number. The Income Tax Department describes it as a 10-character alphanumeric identifier used for TDS and TCS administration.

Which provision governs TAN in 2026?

Section 397 of the Income-tax Act, 2025 is the principal provision for TAN compliance and reporting under the legislation generally effective from 1 April 2026, subject to the applicable transitional and saving provisions.

8. Official legal references and resources

Updated: 27 October 2026. This article explains the statutory framework for general information; apply the legislation, rules and notifications relevant to the particular tax period and facts.