TAN or Tax Deduction and Collection Number is a mandatory 10 digit Alpha-Numeric code mandatorily obtained by all persons who are responsible for deducting tax at source or collecting tax at source on behalf of the Government. The Tax deducted is required to be deposited with the Central Government quoting the TAN number. Salaried Personnel are not required to obtain TAN or deduce 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. Specified criteria to collect and deduct tax at source are already prescribed by the Government.
To obtain TAN, an 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.
Reasons To Register
Mandatory for Deduction & Collection of Tax
The government has specified certain transactions including salary where the assessee needs to collect or deduct the tax from the source itself. While entering into such transactions, Tax Account Number is mandatory to be mentioned.
TDS Certificate & Filing
Every person deducting TDS at source must issue a certificate to the effect that the tax has been deducted with other required particulars. The certificate of TDS must quote the TAN of the deductors. Also, while filing TDS returns online, providing TAN is mandatory.
Copy of Aadhar Card or other address proof
Name, contact details and signature of the applicant
Certificate of Incorporation
Certificate of Incorporation in case of company and LLP
Agreement in case of LLP and Partnership Firm