Tax Account Number (TAN)

What is the Tax Account Number(TAN)?

TAN number is a specific number allotted for Deduction/ Collection of TDS and payment of same into Govt A/c by a person, who is making payment in relation to a business purpose/ transaction. The TAN No provides a unique Identification to Tax Deductor / Collector and help in the tracking of transactions, like payment of taxes and return filing. TAN Number is required to be quoted on all TDS Returns and Payments. TAN No. can be applied through online as well as through TIN-FC Centres.

Tax Account Number (TAN)

Why TAN No is Required?

As per Mandate from Income Tax department, every business entity needs to deduct TDS (Tax Deduction at Sources), while making payment for certain business transactions, such as payment to Contractors/Sub-Contractor, or Professional for their services. After such deduction, such payment needs to be deposit in Govt. A/c through online banking or through challan to be deposited in specified Banks and, after that, a return also needs to be filed in this regards.

Simply TAN no is a must before anyone can proceed for a Tax deduction or payment.

Does every business entity need to take TAN No?

No, Only those business which needs to deduct TDS or Collect TDS need to apply for TAN No.

What happens if I take TAN No, even it was not required?

Taking TAN No is not a legal mistake, however, once you have taken the TAN no, you need to mandatorily file a quarterly return, even no tax has been collected by you. Hence it adds an additional compliance cost without any benefit. In fact, if you forget to file the return, you will end up paying 100 Rs late filing fee per day till the date of submission of returns.

It has been seen that much online company formation consulting firm offer free Tax Account Number, without understanding the actual need of a client. That practice actually put an additional compliance burden on the client.

How to apply for TAN online?

  1. An applicant for TAN needs to be filled in Form 49B online.
  2. In case there’s an error, it needs to be rectified and the form needs to be re-submitted.
  3. A confirmation screen with data filled which is provided by the applicant would be displayed.
  4. The applicant can edit or confirm the same.

Documents Required for TAN:

While applying for a new TAN, applicants are not required to submit any documents. The only thing they need to submit is the signed acknowledgment slip if they apply for a new TAN through online mode.

Income Tax Return filing

What are Compliances which need to be done after taking TAN no.?

After taking TAN No every firm need to comply with 2 compliances:-

  • Payment of tax deducted/Collected:-The Total payment deducted by assessee need to be paid by 7th of Next Month in Govt. A/c
  • Filing of return:- After payment of taxes and Return of same should be uploaded for every Quarter before 15th of next month of the quarter ending

Services Provided by AKT Associates

  • TAN Application and TDS Return filing
  • TDS Related notices or, default Notices issued by the department
  • Other matter related to TDS Deduction and Rate of TDS

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