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TAN Application - An Overview
We have all heard about the TDS deduction generally on our salary or on the fixed deposit interest. TDS is just another way to collect Income tax. The difference is that tax is collected at the source of income and hence the name for this tax is Tax Deducted at source. Likewise, the income tax department has Tax Collected at Source (TCS) mechanism which is a similar way to collect income tax.
TDS is the amount deducted before the payment of the money by the company and treated as an expense by the company. Examples of TDS deduction are on the payments made via interest, salary, rent, professional fees, etc.
Whereas TCS is the amount collected at the time of selling specified items stated by the tax department and treated as income for the company. TCS is collected for various items like forest products, timber selling, mines and quarries, toll plaza, etc.
For the purpose of TCS and TDS, under section 203A of the Income Tax Act,1961 obtaining TAN is compulsory for individuals or businesses. The primary purpose of the tax deduction and collection account number, commonly known as TAN, is related to deduction or collection of tax at source. TAN is assigned to the payee and is essential in filing quarterly TDS returns.
What is TAN?
TAN is a Tax deduction and collection account number which is being assigned to any person who is required to deduct TDS and Collect TCS as per Income Tax Act, 1961.
TAN number comprises of 10 alphanumerical digits.
For example, the TAN number would look like this, “ABCD12345E”
Here in the example, TAN contains 10 alphanumeric characters. The first four are alphabets, the next five are numbers and the last character will again be an alphabet.
This number must be quoted in all documents pertaining to TDS (Tax Deducted at Source). TAN is mentioned on TDS challans and certificates. In case the TAN has not been quoted, we cannot claim TDS in our returns. The same TAN can be used by an individual for both TDS and TCS. The governing body for the issuance of TAN is NSDL-TIN.
Documents Required for TAN Application
No specific document is required, when TAN is applied online for individuals. They can just submit the application form along with prescribed fee for the application.
If any document is demanded after submission of the application, then it can be provided accordingly.
When application is made offline, the submission of KYC documents becomes essential. And such documents are,
Passport size photo
For partnership firm:
Passport size photo – Authorised partner
ID proof – All partners
Address proof – Business location
Bank Account Statement of the firm
How to Apply for TAN Online
TAN is mandatory for various legal documents such as TDS/TCS returns, certificates and payment challans. A person who may apply for TAN can be:
- an Individual
- a Sole proprietor or HUF
- any Firm
- an Association of Persons/ a Body of Individuals etc.
- A Company
- The Central/State Government/Local Authority
As per the NSDL-TIN website,
- An applicant will fill Form 49B online and submit the form.
- If there are any errors, rectify them and re-submit the form.
- A confirmation screen with all the data filled by the applicant will be displayed.
- The applicant may either edit or confirm the same.
Step by step procedure of for online application of TAN
There are two ways to apply for TAN. application One is an online application through with Digital Signature Certificate.
Another one is the offline method.
Procedure for TAN:
Here is how a person can apply for TAN online:
Step 1: Open tin-nsdl Website
Step 2: Choose TAN under services
Step 3: Select Apply TAN online
Step 4: Fill Form 49B online
Step 5: Applicant needs to mention Assessing Officer Code.
Step 6: A confirmation of the submission of the form with the details filled by the applicant is shown on screen.
Step 7: In case if there is any mistake, the equivalent is required to be amended or corrected and the form should be re-submitted.
Step 8: After the successful submission of the form, an acknowledgment will be generated.
Step 9: DSC validation is performed
Step 10: The website will take you to the payment gateway for TAN application fees.
Procedure after TAN Application
Offline method of TAN application starts with manual completion of TAN application form ie., Form 49 B. It has to be submitted along with necessary documents and the prescribed fee. Once the form is filed, a 14-digit acknowledgment number will be generated. This acknowledgment has to be signed by the applicant and attested by a Magistrate or a Notary Public or Gazetted Officer under official seal and stamp.
The acknowledgment duly signed, along with the demand draft, if any, shall be sent to the NSDL addressing:
NSDL e-Governance Infrastructure Limited,
5th floor, Mantri Sterling,
Plot No. 341, Survey No. 997/8,
Near Deep Bungalow Chowk,
Pune – 411016
Frequently Asked Questions
Using this link https://tin.tin.nsdl.com/tan2/servlet/StatusTrack, an applicant can check the status of TAN application by entering the application type and acknowledgement number.
You can get the Form 49B from the following sources: Download the TAN application form from the IT Department website at free of cost. Also can Collect the form from the nearby TIN-FC.
Yes, you need to fill the same form through online, for changing the details in TAN.
Tax Information Network?(TIN) is an initiative by the Income Tax Department of India (ITD) for the modernization of the current system for collection, processing, monitoring, and accounting of direct taxes using information technology, and TIN FC denotes TIN-Facilitation centres.
TAN?applicants are required to provide the?AO code?in their application. This information can be obtained from the Income Tax Office and also can be ascertained while filing the application form online.