TAN Registration

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In India, it is mandatory for businesses to have a Tax Deduction Account Number (TAN). This number is issued by the Income Tax Department and is used as a unique identifier for individuals or entities responsible for deducting or collecting Tax at source.It is compulsory to mention the TAN in all TDS returns and on other documents related to income tax procedures. Non-compliance may lead to penalties.

tan registration

What is TAN?

TAN, or Tax Deduction and Collection Account Number, is a unique 10-digit alphanumeric identifier issued by the Income Tax Department. It’s primarily used by individuals or entities responsible for deducting or collecting Tax at source (TDS/TCS).

TAN Number: Definition and Configuration

he Tax Deduction and Collection Account Number, abbreviated as TAN Number, is a ten-character alphanumeric identifier designed with a specific structure:

  • First Four Characters (Alphabetic): The TAN’s initial three characters represent the jurisdiction where it was issued. The fourth character, meanwhile, signifies the first letter of the name of the entity or individual applying for the TAN.
  • Middle Five Characters (Numeric): These central five characters are system-generated unique numbers.
  • Final Character (Alphabetic): The concluding character is a system-generated unique letter.

The Importance of Securing a TAN Number

As outlined in Section 203A of the Income-tax Act, 1961, any individual or entity tasked with the responsibility of deducting or collecting Tax at source is required to obtain a TAN (Tax Deduction and Collection Account Number). Moreover, this section stipulates that the TAN Number be incorporated in multiple documents.

The TAN should be clearly stated in the following documents:

  • TDS (Tax Deducted at Source) or TCS (Tax Collected at Source) statements/returns.
  • Challans related to TDS or TCS payments.
  • Issuance or presentation of TDS or TCS certificates.
  • Various forms and documents associated with income tax procedures and submissions.

Who Should Obtain a TAN?

Tax Deducting Entities: Any individual or organization that needs to deduct Tax at source during certain transactions, such as salary distributions, contractor payments, or rent payments exceeding Rs.1,80,000 annually.

  • Non-Profit Organizations: Non-profits that make specific payments surpassing the designated threshold.
  • Business Branches: Branches of companies that execute specified payments exceeding the set threshold limits.
  • Salaried Individuals: Those earning a salary do not need to obtain a TAN or deduct Tax at the source.

TAN Registration

TAN Registration is the process through which eligible entities apply for and obtain their TAN. Once registered, the entity can legally deduct or collect Tax at source and remit that Tax to the government. This Registration also mandates that the TAN be mentioned in all TDS/TCS transactions, returns, and related compliance documents.

Without a valid TAN, entities may face penalties for non-compliance when conducting tax-related activities. It ensures that the Income Tax Department can efficiently track and manage tax collections and deductions, thereby streamlining tax administration in the country.

Features of TAN Registration

  • Lifetime Validity: Once obtained, a TAN is valid for a lifetime. This means entities or individuals don’t need to renew or reapply for it periodically.
  • Mandatory for TDS Payments: When making Tax Deducted at Source (TDS) payments to an authorized bank, the TAN must be quoted. Without a TAN, banks will not accept your TDS deposits.
  • Requirement for Proprietors: Even individuals running a sole proprietorship business are mandated to obtain TAN if they are liable to deduct Tax at the source. This underscores the importance of TAN not just for larger entities but also for individual business owners.
  • Unique Identifier: TAN is a distinct 10-character alphanumeric code. This unique identifier is issued by the Income Tax Department specifically for those individuals or entities responsible for deducting or collecting Tax at source.

Advantages of TAN Registration

  • Ensuring Legal Compliance: Securing a Tax Deduction and Collection Account Number (TAN) is pivotal for any entity tasked with a tax deduction or collection. Holding a TAN guarantees adherence to tax regulations, shielding you from potential legal repercussions or penalties due to non-compliance.
  • Streamlined Tax Operations: Possessing a TAN enhances the efficiency of your tax deduction and collection mechanisms. This paves the way for timely and accurate tax deductions and submissions to the government, mitigating any scope for errors or lags in the cycle.
  • Effortless Monitoring and Reconciliation: A TAN empowers you with a straightforward method to monitor and reconcile your tax transactions. You can swiftly retrieve your TDS/TCS records and certificates, which confirms the accurate deduction and payment of taxes. Such a systematic approach simplifies the oversight of tax transactions and reinforces regulatory compliance.

Documents Needed for TAN Registration

  • Passport Size Photograph
  • Proof of Address for the Registered Office
  • Company’s PAN Card
  • TAN Application Form

TAN Registration Process in India

Additionally, the individual can retrieve the TAN application from the NSDL site, complete it, and then hand over the filled form along with the necessary fees to the TIN-FC.

Mandatory PAN: It’s crucial to include your PAN (Permanent Account Number) Registration number in the application. A PAN serves as an essential identification marker, regardless of whether the tax collector or deductor account number follows an old format. Consequently, it’s beneficial to undergo online PAN Registration simultaneously when applying for online TAN Registration.

FAQs

What is TAN?

TAN, or Tax Deduction and Collection Account Number, is a unique 10-digit alphanumeric code issued by the Income Tax Department in India. It is mandatory for entities and individuals responsible for deducting or collecting taxes at the source.

Is TAN mandatory for all businesses and individuals?

TAN is mandatory for those who are required to deduct or collect taxes at the source. It is not mandatory for individuals or entities that do not have TDS or TCS obligations.

Who needs to obtain a TAN?

Any person or entity responsible for deducting or collecting taxes at the source, such as employers, business entities, and individuals, needs to obtain a TAN.

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Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s 142(1) | Income Tax Notice u/s 144 |Income Tax Notice u/s 148 | Income Tax Demand Notice | Psara License | FCRA Online

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Practice area's of B K Goyal & Co LLP

Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s 142(1) | Income Tax Notice u/s 144 |Income Tax Notice u/s 148 | Income Tax Demand Notice | Psara License | FCRA Online

Company Registration Services in major cities of India

Company Registration in Jaipur | Company Registration in Delhi | Company Registration in Pune | Company Registration in Hyderabad | Company Registration in Bangalore | Company Registration in Chennai | Company Registration in Kolkata | Company Registration in Mumbai | Company Registration in India | Company Registration in Gurgaon | Company Registration in Noida | Company Registration in lucknow

Complete CA Services

CA in Delhi | CA in Gurgaon | CA in Noida | CA in Jaipur | CA Firm in India

RERA Services

RERA Rajasthan | RERA Haryana | RERA Delhi | UP RERA

Most read resources

tnreginet |rajssp | jharsewa | picme | pmkisan | webland | bonafide certificate | rent agreement format | tax audit applicability | 7/12 online maharasthra | kerala psc registration | antyodaya saral portal | appointment letter format | 115bac | section 41 of income tax act | GST Search Taxpayer | 194h | section 185 of companies act 2013 | caro 2020 | Challan 280 | itr intimation password |  internal audit applicability |  preliminiary expenses |  mAadhar |  e shram card |  194r |  ec tamilnadu |  194a of income tax act |  80ddb |  aaple sarkar portal |  epf activation |  scrap business |  brsr |  section 135 of companies act 2013 |  depreciation on computer |  section 186 of companies act 2013 | 80ttb | section 115bab | section 115ba | section 148 of income tax act | 80dd | 44ae of Income tax act | west bengal land registration | 194o of income tax act | 270a of income tax act | 80ccc | traces portal | 92e of income tax act | 142(1) of Income Tax Act | 80c of Income Tax Act | Directorate general of GST Intelligence | form 16 | section 164 of companies act | section 194a | section 138 of companies act 2013 | section 133 of companies act 2013

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