TAN is Tax Deduction and Collection Number. TAN is used by the Income Tax Department to track all payments and filings of persons or entities required to deduct tax at source and pay it to the Government. TAN is a 10 digit alpha numeric number.
TAN or Tax Deduction and Collection Number (TAN) is mandatory 10 digit alpha number required to be obtained by all persons who are responsible for Tax Deduction at Source (TDS) or Tax Collection at Source (TCS) on behalf of the Government. Tax deducted at source (TDS) ensures that the Government’s collection of tax is proponed and the responsibility for paying tax is diversified. The person deducting the tax at source is required to deposit the tax deducted to the credit of Central Government – quoting the TAN number. Individuals who are salaried are not required to obtain TAN or deduct tax at source. However, a proprietorship business and other entities (i.e., Private Limited Company, LLP, etc.,) must deduct tax at source while making certain payment like salary, payments to contractor or sub-contractors, payment of rent exceeding Rs.1,80,000 per year, etc. On deducting tax at source, the entity registered for TAN will issue a TDS Certificate as proof of collection of tax.
To obtain TAN, application must be made for allotment of TAN in Form 49B along with the required supporting documents. Based on the application, the TAN will be allotted to the entity and the entity must quote the TAN in all TDS/TCS returns, TDS/TCS payment challans and all TDS/TCS Certificates. IndiaFilings can help you obtain your TAN registration quickly and hassle-fee. IndiaFilings is an authorized TAN Facilitation Center.
It is mandatory for business entities and other type of entities to deduct tax at the source, i.e., while paying rent, salary, etc., and pay the same to the Government. To track these payments, TDS Certificates and TDS Filings, the Government mandates TAN registration for all entities required to deduct tax at source. TDS ensures the responsibility for payment of tax is diversified and the Government receives tax sooner.
Individuals who are salaried are not required to deduct tax at source. However, Individuals who run a proprietorship business are required to deduct tax at source. All other entities like LLP, Private Limited Company, Limited Company, Trust, Society, etc., are required to obtain TAN and deduct tax at source. Not obtaining TAN when applicable, attracts a penalty of Rs.10,000.
To obtain TAN, application must be made in Form 49B at any of the authorized TAN Facilitation Center. IndiaFilings is an authorized TAN Facilitation Center.
No, PAN cannot be quoted where TAN is required. PAN and TAN serve two different purposes. Therefore, it is mandatory for those deducting tax at source to obtain a TAN.
Tax deduction at source happens at different rate based on the transaction. TDS for salary is determined based on the employees’ salary and tax payable by the employee. TDS rate of 10% is adopted for rent of land, building or furniture if the annual rent exceeds Rs.1,80,000/-. For a complete list of TDS, click here.
|Section||For Payment of||On Payments Exceeding||Individual/HUF||Others|
|193||Interest on Debentures||Rs. 5000/-||10%||10%|
|194||Deemed Dividend||No Minimum||10%||10%|
|194 A||Interest other than on securities by banks||Rs. 10000/-||10%||10%|
|194 A||Interest other than on securities by others||Rs. 5000/-||10%||10%|
|194 B||Winnings from Lotteries / Puzzle / Game||Rs. 10000/-||30%||30%|
|194 BB||Winnings from Horse Race||Rs. 5000/-||30%||30%|
|194 C(1)||Payment to Contractors||Rs. 30000/- for single payment, Rs. 75000/- for aggregate payment during Financial Year||1%||2%|
|194 C(2)||Payment to Sub-Contractors / for Advertisements|
|194 D||Payment of Insurance Commission||Rs. 20000/-||10%||10%|
|194 EE||Payment of NSS Deposits||Rs. 2500/-||20%||NA|
|194 F||Repurchase of units by Mutual Funds / UTI||Rs. 1000/-||20%||20%|
|194 G||Commission on Sale of Lottery tickets||Rs. 1000/-||10%||10%|
|194 H||Commission or Brokerage||Rs. 5000/-||10%||10%|
|194 I||Rent of Land, Building or Furniture||Rs. 180000/-||10%||10%|
|Rent of Plant & Machinery||Rs. 180000/-||2%||2%|
|194 IA||Transfer of Immovable Property (w.e.f. 01.06.2013)||Rs. 50 Lacs/-||1%||1%|
|194 J||Professional / technical services, royalty||Rs. 30000/-||10%||10%|
|194 J(1)||Remuneration / commission to director of the company||–||10%||10%|
|194 J(BA)||Any remuneration / fees / commission paid to a director of a company, other than those on which tax is deductible u/s 192.||–||10%||10%|
|194 L||Compensation on acquisition of Capital Asset||Rs. 100000/-||10%||10%|
|194 LA||Compensation on acquisition of certain immovable property||Rs. 200000/-||10%||10%|
TAN Registration can be obtained in 5-10 working days from date of application along with the required documents.
Any entity cannot have two or more TAN. It is illegal for an entity to possess more than one TAN.
Tax Deducted at Source (TDS) must be deposited through banks using Challan 281 quoting the TAN number of the entity. The deadline for payment of TDS is the 7th day of each month.
TDS Return should be filed quarterly on the 15th day of July, October, January and May. The TDS return filed on these months will correspond to the transaction of the preceding three months. Delay in furnishing eTDS statement will result in a mandatory penalty of Rs.200 per day, with the total fees not exceeding the total amount of TDS made for the quarter.
We are one of the leading company registration consultant, tax consultants based at Bihar. If you want to obtain new pan or tan number for your company or business or just for your self, please call us at +91-7050515253, +91-8540099000 or visit us at www.meeradgroup.in
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