As per Income tax Act, 1961, a Tax deduction and collection account number is a 10 digit number issued to persons who are required to deduct or collect tax on payments made by them.
TAN registration is required for making tax deduction or tax collection at source, remittance of TDS payments and issuance of TDS certificates.
If your firm is responsible for TDS deductions, registering for a TAN No (10 digit alpha numeric Code) will help you remit taxes collected into the appropriate account and maintain your statutory obligations. Any proprietorship business or Private Limited Company, LLP, etc., must deduct tax at source for payments like salary, payments to contractor or sub-contractors, payment of rent exceeding Rs.1,80,000 per year, etc.
If you are registered with TAN, you can issue a TDS Certificate as proof of collection of tax.
TAN Registration Faqs
What is TAN?
TAN or Tax Deduction and Collection Account Number is a 10 digit alpha numeric number required to be obtained by all persons who are responsible for deducting or collecting tax.
Why is it necessary to have TAN?
The provisions of Section 203A of the Income-tax Act, 1961 require all persons who deduct or collect tax at source to apply for the allotment of TAN. The section also makes it mandatory to quote TAN in all TDS/TCS/Annual Information Returns, payment challans and certificates to be issued. If TAN is not quoted, TDS/TCS returns will not be accepted by TIN-Facilitation Centres (TIN-FCs) and challans for TDS/TCS payments will not be accepted by banks. Failure to apply for TAN or not quoting the same in the specified documents attracts a penalty of Rs. 10,000.All those persons who are required to deduct/collect tax at source on behalf of Income Tax Department are required to apply for and obtain TAN.
Who must apply for TAN?
All those persons who are required to deduct/collect tax at source on behalf of Income Tax Department are required to apply for and obtain TAN.
What is the procedure to obtain a TAN?
An application for allotment of TAN is to be filed in Form 49B and submitted to any TIN-FC. Addresses of TIN-FCs are available at NSDL-TIN website. Alternatively, you can apply for TAN online at the NSDL-TIN website.