TAN number is required by a businessman or employer while paying salaries to the employees. And a PAN number is required by an employee (individual) when he receives his salary. In this blog, we shall discuss what TAN number is and how apply for it online and offline in length.
What is TAN Number in Income Tax?
TAN Number full form is Tax Deduction and Collection Account Number. It is a 10-digit alphanumeric number which is required by individuals who are responsible to deduct and collect the tax. However, if a person is required to deduct tax under 194-IA Section, he can use PAN number at the place of TAN since it is not compulsory for him to obtain TAN.
Notably, TAN number is issued by the IT Department – Income Tax Department of India to all individuals who are responsible for deducting TDS (Tax Deducted at Source). Or to the individuals who collect TCS (Tax Collected at Source).
How many Digits are there in TAN Number?
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The TAN number format includes 10 digits alphanumeric number. The first four characters of TAN number are alphabets. The next 5 characters are digits and the last character is an alphabet. For instance, if MR. Raj Sharma wants to start his Pharmaceuticals company. Then his TAN would be – AMN R 23234 K.
Notably, the first alphabets of TAN are random. The fourth alphabet is the first letter of the name of the business owner – TAN applicant.
What is the Difference between TAN & PAN?
A TAN number is assigned to an individual who is responsible for deducting and collecting TDS. Whilst the PAN is allotted to individuals who earn income and are responsible to pay taxes. Let’s understand this with the help of an example.
Mr. Raj Sharma is the owner of a company and Mr. Sumit Verma is his employee. Mr. Raj will obtain a TAN as he is responsible to deduct and collect the tax. And Mr. Sumit is required to have PAN as he is liable to pay tax on his income.
Who is Eligible to Obtain TAN?
As per the Income Tax Act in India, an individual who is one among the following is eligible to obtain TAN number:
- Branch or Division of a Company
- Branch of Individual Business
- Sole Proprietorship
- HUF – Hindu Undivided Family
- Firm or Branch of Firm
- The body of Individuals/ Association of Persons
- Association of Persons
- Artificial Juridical Person
Where all TAN in Required?
As per the Section 203A of the IT Act, the TAN number is required in the following documents:
- TDS Return/Certificate
- TCS Return/Certificate
- TDS/TCS certificates
- Challans for the payments of TDS/TCS
- Financial Transaction Statements
- Reportable Accounts
The IT Department – Income Tax Department in India is liable to issue and allot TAN in India. The offline and online application is managed by NSDL. Significantly, there is a penalty of INR 10,000 as per the Section 272BB for the persons who do not obtain TAN or quote incorrect number.
What is the TAN Application form Fee?
The TAN application form costs INR 55 along with 18% GST which is equal to INR 65. The payment of the fees can be made through the following modes:
Make cash payment at the TIN-FC, in the case of offline payment
A cheque in favor of NSDL – TIN deposited in any HDFC Bank branch, except Dahej. The name on the cheque should be TAN – NSDL.
Demand draft in favor of NSDL – TIN, payable at Mumbai.
Credit/Debit card or net banking
How to get TAN Online?
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Online TAN application is the easiest way and this facility is offered by the Tax Information Network. To apply for a TAN number online, you are required to follow the following steps:
After clicking on the link, select the category for which you are filling the TAN application form, Company, Branch, Division, etc.
Fill the correct and relevant information and click confirm.
On confirmation, the acknowledgment will appear with the following information:
- Acknowledgment number – 14 digit
- Name and status of the applicant
- Contact details
- Payment details
You will have to take the print of the acknowledgment and sign it.
In case the TAN application is for an individual, the authorized person will have to seal and stamp the acknowledgment.
In case the thumb impression is used, the acknowledgment must be attested by Magistrate/Notary Public/Gazetted Officer.
You will have to next send the acknowledgment and demand draft to the address – NSDL – E-governance Infrastructure Limited, 5th Floor, Mantri Sterling, Plot No. 341, Survey No. 997/8, Model Colony, Near Deep Bungalow Chowk, Pune – 411016.
Notably, the acknowledgment must be sent within 15 days of the application.
The TAN number would be allotted within the 5 working days through email, in case the online payment method is used.
How to get TAN Offline?
To fill TAN application offline, you will have to first download the FORM 49B online. Then the application must be duly filled and submitted to TIN – Facilitation Centres. Also, the copies of the applicant’s identity proof and address proof should be attached.