Overview |
TAN |
Payment of TDS |
Return |
Rates |
TAN
Meaning of TAN
Tax Deduction Account Number is a 10-digit alphanumeric number issued by the Income-tax Department (hereinafter referred to as ‘TAN’). TAN is required to be obtained by all persons who are responsible to deduct tax at source (‘TDS’) except in case of a person who is responsible to deduct tax at source under Section 194-IA/Section 194-IB/Section 194M.
Given below is an illustrative TAN:
DELM12345L
First 3 alphabets of TAN represent the jurisdiction code, 4th alphabet is the initial of the name of the TAN holder. The next 5 digits of the TAN are system generated numbers between 00001 to 99999 and last character, i.e., the tenth character is an alphabetic check digit.
Persons liable to apply for TAN
Every person who is liable to deduct tax at source is required to obtain TAN. However, a person who is required to deduct tax under Section 194-IA/Section 194-IB/Section 194M can use PAN in place of TAN as he is not required to obtain TAN.
Relevance of TAN
It is mandatory to quote TAN in the following documents:
(a) TDS statements i.e. return
(b) Challans for payment of TDS
(c) TDS certificates
(d) Other documents as may be prescribed
Penalty
If a person fails to apply for TAN or failed to quote or quotes incorrect TAN in the above-specified documents, a penalty of Rs. 10,000 shall be levied.
Overview
For a quick and efficient collection of taxes, the Income-tax Act has incorporated a system of deduction of tax at the point of generation of income. This system is called “Tax Deducted at Source” commonly known as TDS. Under this system, tax is deducted at the point of origination of income. Tax is deducted by the payer and the same is directly remitted to the Government by the payer on behalf of the payee.
The provisions of tax deducted at source presently apply to several payments like salary, interest, commission, brokerage, professional fees, royalty, etc.
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