Uses of TAN

What is TAN?

TAN is defined as a 10-digit alphanumeric number provided by India’s Income Tax Department to entities that have to deduct or collect tax on payments made by them. All TDS/TCS returns, challans, and correspondence with the Income Tax Department must include the deductors’ and collectors’ TAN. It acts as the entity’s unique identification number and assists the department in keeping track of tax deductions and collections. TAN is required for individuals who are liable for deducting tax at source (TDS) on salary, interest, dividends, and other payments stated by the Income Tax Department. Persons responsible for collecting tax at source (TCS) on specific transactions as stipulated by the government must also have TAN....

Full-Form of TAN

TAN stands for Tax Deduction & Collection Account Number. TAN is a unique identification number used for checking these tax deductions & collections ensuring people’s compliance with tax regulations. TAN enables accurate & transparent tax reporting and payment. It is illegal for individuals or entities to hold or use more than one TAN....

Who is Allowed to Apply for TAN?

Every individual who is obligated to deduct and collect income tax on behalf of the Income-tax authorities must apply for TAN. Furthermore, TAN must be included in every TDS/TCS return, TDS/TCS payment challan, certificate to be issued and so on. Failure to apply for TAN may result in the imposition of a penalty. Persons liable to deduct or collect tax at source must get a TAN from the Income Tax Department. There are, however, exceptions to this rule. These are the following:...

How to Apply for TAN?

Everyone is required to deduct and collect taxes on the government’s behalf. As a result, applying for a TAN is required, however the question of how to apply arises. An individual may apply for TAN either online or offline. It is simple and anyone can get their TAN number by following the procedures below....

Structure of TAN

The TAN Number is made up of both alphabets and digits. TAN’s first four characters are alphabets. The following five letters are numbers, while the last character is an alphabet. Thus,...

Advantages of TAN

1. Legal Compliance: The TAN number, in and of itself, provides no benefits to the assessee other than the ability to escape the file by complying with a legal obligation. According to the provisions of the Income Tax Act of 1961, everybody responsible for deducting or collecting tax at source must get a TAN number. Failure to get a TAN number or offering an incorrect TAN number can lead to fines and legal consequences....

Uses of TAN

The primary usage is listed beneath the benefits. Its objective is to collect tax as soon as a taxpayer’s income is generated or earned. However, a taxpayer may claim the following as part of legal compliance:...

Difference Between TAN and PAN

Basis TAN PAN Meaning The income-tax authorities allotted a unique 10-digit alphanumeric number to each individual who is obligated to deduct TDS or collect TCS. PAN, on the other hand, is a ten-digit alphanumeric 10-digit number allotted by the income-tax authorities to each assessee in order to uniquely identify them. Purpose TAN is an additional burden placed on the shoulders of an assessee. PAN can be defined as a unique identifying number assigned to any assessee who is required to or voluntarily chooses PAN. Holder Every assessee having TAN is required to have PAN Every assessee with a PAN may or may not have a TAN. Required by Individuals and businesses must pay tax at the source. It is required by Every taxpayer ....

Conclusion

The ten-digit alphanumeric number allotted by the income tax authority to collect, deduct, and deposit tax on behalf of another individual to the income-tax authorities is known as the TAN. In the case of applicability, a person must apply for TAN and then follow all of the legal conditions outlined in the Income-tax Act. If a person fails to comply with the provisions, the authorities may open a file against them. When making any TDS/TCS filings, the individual holding the TAN must quote the TAN in all communication otherwise, it may be considered invalid....