TAN Registration

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. Non-compliance may lead to penalties. Understanding what is TAN, its purposes, and usage to maintain compliance with Income tax department.

DisyTax can help both individuals and companies secure their TAN Number (Tax Deduction and Collection Account Number) in a prompt and efficient manner. Leveraging our proficiency in tax and regulatory affairs, DisyTax makes the complex TAN Registration process easy.

What is TAN Registration Number?

TAN (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

The Tax Deduction and Collection Account Number, abbreviated as TAN Number, is a ten-digit 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 is initial of the entity or individual applying for the TAN.
• Middle Five Characters (Numeric): These central five characters are exclusive identifying numerals with no added significance.
• Final Character (Alphabetic): The concluding character is a system-generated unique letter.

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.

Importance of TAN Number

As outlined in Section 203A of the Income-tax Act, 1961, any individual or entity responsible of deducting or collecting Tax at source, is required to obtain a TAN (Tax Deduction and Collection Account Number).Failure to quote the TAN number in returns or documents will result in a penalty of Rs.10,000. TAN should be quoted in the following documents:

• TCS or TDS statements/returns.
• Challans for TDS or TCS payments.
• Submission of TCS or TDS certificates.
• Collection or submission of a wide variety of IT-related forms.

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 deduction related activities. It ensures that the Income Tax Department can efficiently track and manage tax collections and deductions.

Features of TAN Registration

The Tax Deduction and Collection Account Number (TAN) is a pivotal for those responsible for deducting or collecting Tax at source. Here are the main features of TAN registration number:

• 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.

In essence, the C is crucial for ensuring compliance with the tax regulations in India.

Advantages of TAN Registration Number

• 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 Required for TAN Registration

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

TAN Registration Process in India: A Comprehensive Guide

In India, the Tax Deduction and Collection Account Number (TAN) can be registered through two primary methods: TAN apply online and offline. TAN application online has the benefit of instant processing and is less time-consuming, while the offline process is suitable for people who prefer a paper-based application process. Here’s a step-by-step breakdown of both procedures:

Offline TAN Registration Process

The applicant should fill and submit Form 49B (Form of application for allotment of tax deduction and collection account number) to any TIN-Facilitation Center (TIN-FC) of Protean with the required fees for allotment of TAN. An applicant can also download the TAN application from the NSDL website and submit the filled form along with the fees to the TIN-FC. In the case of an in-person TIN application, there is no need to furnish any supporting documents to the IT department.

Online TAN Registration Process

Applicants can apply online for TAN through the NSDL website. Applicants should read the instructions, fill the online form and submit it. After submission of the form online, they will receive the acknowledgement number. They must print the acknowledgement number and send it to the NSDL office at Pune. They can pay the required fees online or through a demand draft or cheque.

Once the IT department receives the TAN application, they will verify the details and issue the TAN of the applicants to NSDL. The NSDL will send the TAN details to the applicant’s address provided in Form 49B or send an email with the TAN details.

Streamlining TAN Registration with DisyTax

DisyTax is a prominent platform. we streamline various business and financial processes in India, including TAN registration. With our comprehensive understanding of the Indian taxation system, DisyTax can guide individuals and businesses seamlessly through the TAN registration process

Furthermore, our team stays updated with the latest regulations and guidelines, ensuring that clients remain compliant with all mandates of the Income Tax Department. Hence, for a hassle-free and efficient TAN registration, talk to our DisyTax now!