Apply for TAN
Apply for TAN of Individual, Proprietorship firm, Partnership firm, HUF, Company, LLP
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If you are starting a business in India, you might have come across the term TAN. But what exactly is TAN, and how do you apply for it? Don’t worry! This guide will walk you through the process in simple language.
What is TAN?
TAN, or Tax Deduction and Collection Account Number, is a unique ten-digit alphanumeric number issued by the Income Tax Department of India. It is an essential identifier for entities responsible for deducting or collecting tax at the source, which is commonly known as TDS (Tax Deducted at Source) and TCS (Tax Collected at Source).
Breaking Down TAN
The TAN format looks like this: RKTG12345E. Each part of the TAN has significance:
- First Three Characters: Alphabetic series indicating the city or region where the TAN is issued. Here RKT stands for Rajkot.
- Fourth Character: Represents the initial letter of the name of the entity (company, individual, etc.). Here G stands for Gati enterprise.
- Next Five Characters: A numeric sequence unique to each TAN.
- Last Character: An alphabetic check digit for verification purposes
Who Needs to Apply for TAN?
If you are running a business or if you are responsible for making certain types of payments like salaries, rent, contract payment, professional fees, purchase goods, interest on loan, commission, etc where tax needs to be deducted at source then you will need a TAN. This businesses includes companies, partnership firms, LLP, individuals, proprietorship firm and even government offices.
Why is TAN Important?
Under the Income Tax Act, obtaining a TAN is compulsory for all entities responsible for TDS/TCS. Non-compliance can lead to severe consequences, including:
- Penalties: Failure to apply for TAN or not quoting TAN on relevant documents can result in a penalty of ₹10,000.
- Inability to File TDS Returns: Without a TAN, businesses cannot file TDS returns, leading to a penalty of ₹ 200 per day for not filing TDS return.
- Difficulty in Tax Credits: Employees or contractors from whom tax is deducted may face difficulties in getting tax credits without the correct TAN being quoted on TDS certificates.
Uses of TAN
- TDS Returns Filing: TAN must be quoted in TDS returns, TDS payments, and any other communication related to TDS.
- Issuance of TDS Certificates: When issuing TDS certificates to deductees, the TAN must be mentioned to ensure proper tax credit.
- Transactions with Government: For any dealings involving TDS, TAN is essential to ensure compliance and smooth transactions.
TAN vs PAN
It’s important not to confuse TAN with PAN (Permanent Account Number). While both are issued by the Income Tax Department, they serve different purposes:
- PAN: Used for individuals and entities for all tax-related purposes, like filing income tax returns.
- TAN: Specifically for deducting or collecting tax at source and filing TDS/TCS returns
Types of TAN Applications
There are basically two types of TAN applications –
- Application for issuance of new TAN
- Form for change or correction in TAN data for TAN allotted
How to Apply for TAN
Applying for TAN is straightforward and can be done online. Here’s a step-by-step guide to help you through the process:
Step 1: Visit the NSDL Website
Head over to the NSDL-TIN website. This is the official site for applying for TAN in India.
Step 2: Select TAN Application
On the homepage, you’ll find an option for ‘TAN’. Click on it, and then select ‘New TAN’.
Step 3: Choose the Appropriate Form
You will see different forms depending on the type of applicant:
- Form 49B for Indian companies, firms, or associations.
- Ensure you select the correct form that matches your business type.
Step 4: Fill in the Details
Fill out the form with accurate information. You will need to provide details such as:
- Name of the applicant
- Address
- Contact information
- Relevant business details
Step 5: Review and Submit
Double-check all the information to ensure there are no errors. Once you’re confident everything is correct, submit the form.
Step 6: Payment
You will be directed to a payment gateway to pay the application fee. You can use various payment methods like credit/debit card or net banking.
Step 7: Acknowledgement Receipt
After successful payment, you will receive an acknowledgment receipt. This receipt contains a 14-digit acknowledgment number which you should keep safe for future reference.
How to Apply for TAN Offline
If you prefer the offline method, you can still apply for TAN. Here’s how:
Step 1: Get the Form
Obtain Form 49B from your nearest TIN-FC (Tax Information Network – Facilitation Centre) or download it from the NSDL website.
Step 2: Fill Out the Form
Fill out the form manually with all the required details. Make sure your handwriting is clear and legible.
Step 3: Submit the Form
Submit the completed form along with the required documents to the nearest TIN-FC.
Step 4: Payment
Pay the application fee at the TIN-FC. They will provide you with an acknowledgment receipt.
Step 5: Wait for TAN
After submission, the processing usually takes a few weeks. Once approved, your TAN will be sent to your registered address.
How to Use TAN Correctly
When using TAN, ensure it is quoted on:
- Challans for TDS/TCS Payments: Necessary for making tax payments.
- TDS/TCS Returns: Mandatory for filing quarterly returns.
- TDS Certificates: Issued to individuals or entities from whom tax has been deducted. Example Form16, 16A
Final Thoughts
Applying for TAN is a crucial step for any business handling tax deductions. Whether you choose to apply online or offline, the process is relatively simple if you follow the steps carefully. Ensure you keep all necessary documents handy and double-check your application before submission.
By securing your TAN, you ensure your business remains compliant with Income tax Act, avoiding penalties and ensuring smooth operations. If you have any doubts, don’t hesitate to seek professional advice or consult the official NSDL website.
In case you have any query or are looking for TAN services then you can contact us at +91 9769647582
FAQ (Frequently asked Questions)
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How many days will it take to get TAN number?
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The TAN card is typically delivered within 7-15 business days. However, the final processing time depends on the discretion of the Issuing Authority of the Government of India.
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What is the fee for TAN number?
- The Government fee for the both the applications (new TAN and change request) is 77 (including GST)
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Can I deduct TDS without TAN?
- No. But in case of TDS on payment of consideration of immovable property PAN will do.
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Is TAN compulsory for proprietorship?
- For Proprietorship firm TAN is compulsory only when income tax audit provisions become applicable.
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Is TAN compulsory for partnership firm?
- For Partnership firm TAN is mandatory irrespective of any turnover requirement. You should apply for TAN as soon as you come to know that TDS will need to be deducted in near future.
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