Mon. 24th April 2017
Fin-Lex

Finance and Legle Consultancy Company

(080) 25589889
srinivas@fin-lex.co.in

TAN Registration

TAN Registration

pan

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. Fin-Lex can help you obtain your TAN registration quickly and hassle-fee. Fin-Lex is an authorized TAN Facilitation Center.

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Frequently Ask Questions(FAQs)

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. IndiaFilings is an 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/-. 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%

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.

Highlights of TAN Registration

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 Facilitation Center

Fin-Lex is a authorized TAN facilitation center. Therefore, Fin-Lex 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.

 

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