TAN/PAN Registration

TAN/PAN Registration

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.

Why TAN Registration is required?

• TAN is used for deductions such as salary, interest, and dividends. While depositing tax, the challan type 281 should be used and the 10 digit TAN number should be mentioned correctly along with the name and address of the deductor. It is mandatory to quote TAN in documents like TDS Return, TCA Return, challans for payment of TDS/TCS, or any other prescribed documents.
• Section 194IA provides for deduction of tax at source from payment on transfer of certain immovable property other than agricultural land. Section 194-IB provides for deduction of tax at source at the rate of 5% from payment of rent. The tax shall be deducted if the rent paid or payable exceeds Rs. 50,000 per month or part of the month.
• Section 194M provides for deduction of tax at source at the rate of 5% on the sum paid to a resident on account of contractual work, brokerage, or professional fees, by any individual or a HUF, if the aggregate of such sum exceeds Rs. 50 lakh in a financial year.
• You have to face penalties for not obtaining the tax registration. You will be charged Rs. 5000 or Rs. 200 per day whichever is higher.

Eligibility For TAN Registration

Any of the following who is liable to deduct TDS/TCS:

• Any Individual
• Any Partnership Firm
• Any company registration
• Any LLP registration
• Any HUF registration
• Any OPC registration

Reasons to Register a TAN

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.

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.

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.

TAN Facilitation Center

IndiaFilings is a authorized TAN facilitation center. Therefore, IndiaFilings 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.

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.

Application Preparation

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

Application Processing

Once the application is prepared, IndiaFilings will submit the TAN Application to the Tax Department. IndiaFilings is a TAN Facilitiation Center.

TAN Allotment

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

Prerequisites for registering TAN on e-filing portal

You must complete the following process before registering TAN on income tax site:

• Active and valid TAN
• PAN of the principal contact must be registered on the e-filing portal