TAN Registration

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.

TAN Registration Process

Step 1: TAN Registration

You can obtian TAN Registration in 7 to 12 days, subject to Government processing time.

Step 2: Application Preparation

A Tax Expert will prepare your TAN Application and obtain your signature in the format along with the necessary supporting documents.

Step 3: Application Processing

Once the application is prepared, submit the TAN Application to the Tax Department.

Step 4: TAN Allotment

Once the application and the attached supporting documents are verified, the Tax Department will allot a TAN Number for your business.

Frequently Ask Questions (FAQs)

S.No.

Query

What is TAN?

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.

Why is TAN required?

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.

Who must obtain TAN?

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.

What documents are required for obtaining TAN?

To obtain TAN, application must be made in Form 49B at any of the authorized TAN Facilitation Center.

Can I use a PAN instead of TAN?

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.

At what rate should tax be deducted at source?

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/-.
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Section	For Payment of	On Payments Exceeding	Individual / HUF	Oth- ers
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%

How long does it take to obtain a TAN?

TAN Registration can be obtained in 5-10 working days from date of application along with the required documents.

Can an entity have two or more TAN?

Any entity cannot have two or more TAN. It is illegal for an entity to possess more than one TAN.

When and where should the tax deducted at source be deposited?

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.

When should I file TDS Returns?

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.

TAN Highlights

TAN – Tax deduction Account Number:

PAN is a 10 character alpha-numeric code issued by the Income Tax Department for persons responsible for deducting or collecting tax at source. All most all for-profit entities and not-for-profit entities are required to obtain TAN.

Proprietorship Require TAN:

Salaried individuals are not required to deduct tax at source. However, individuals running a proprietorship are required to obtain TAN and deduct tax at source when required.

Validity:

Once a TAN is issued, it is valid for lifetime. However, TDS Filings must be made quarterly on the 15th day of July, October, January and May. Non-filing of TDS filings within the due date will attract a penalty.

TDS Payments:

Tax Deducted at Source must be paid into authorized bank, quoting the TAN and using Challan 281. TDS during the preceding month must be paid before the 7th day of the following month.

TAN Center:

CivilIndia can help you obtain TAN hassle-free and quickly. Just send the TAN application along with the supporting documents and we will help you get your TAN quickly.

Quick Processing:

TAN can be obtained in 5-10 working days from the time of submission of application with the required documents. The application must be submitted in hard format along with self-attested copy of address and identity proof of the applicant.