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TAN, or Tax Deduction and Collection Account Number, is a 10-digit number which is issued by the Income Tax Department of India.

Any individual or company eligible to collect either TDS or TCS must register themselves under TAN. This number is necessary to access tax-related details, generate challan, check information, etc.

  • Income Tax Act of 1961 mandates TAN registration under Section 203A.
  • Not registering Under TAN or providing wrong TAN number can lead to a fine of Rs.10,000.

One important aspect to know along with what is TAN number is that every individual earning India does not need this registration, unlike PAN. Nevertheless, TAN is primarily related to tax payment and related financial actions. 

This even extends to personal loans or business loans like working capital or machinery loans since loan applications require ITR and other details which are directly affected by TAN registration.

What are the requirements for a TAN number?

It is important to note that applicants do not have to produce any documents or identity proof for TAN application

The absence of any document requirement makes it quite easy for applicants, especially if they are considering to apply for TAN online. However, it is also vital for applicants to check if they are eligible for TAN registration.

 The different types of entities who must register themselves for TAN are listed below:

  1. Every individual (including goods and service providers earning above Rs.2.5 lakh per annum) whose income tax is deducted at source.
  2. Hindu Undivided Family eligible for Tax Deducted at Source.
  3. Companies/trusts/firms and other types of organisations who collect income tax of their employees at the source.
  4. Government (Central and State) and local authorities who avail TCS.
  5. Sole proprietors collecting tax at source.

It is also important to note that it is not possible to renew TAN after its allocation. In case someone is considering what to do if a business is running in loss, and consequently wants to start with a new TAN number, they must surrender their old TAN number.

  • Income Tax regulations allow State Governments to levy a TDS of 1% which can be included in the SGST on service or good providers.

Online TAN application method

Online TAN application procedure is easy and it can be completed swiftly within a few minutes. Especially since this application procedure does not require any documents; it is easy to complete it online. The steps are discussed below in detail.

  1. Applicants must go to the website of NSDL TIN (National Securities Depositories Limited Tax Information Network).
  2. After reaching the official website, applicants must select the option for TAN registration.
  3. Once the TAN application option is selected, it directs applicants to Form 49B. Applicants must carefully fill up this form with accurate details and submit online.
  4. Once submitted, a verification option will pop up. Every applicant must check the draft of Form 49B meticulously before submitting it.
  5. After confirmation, the option to submit this registration form comes up.
  6. When submission of the form is completed, some details are displayed on the screen. These details are listed below.
  • A 14-digit unique acknowledgement number.
  • Name of the applicant along with personal detail.
  • Contact information of the applicant.
  • Payment details of the TAN registration.
  • Space for signature of the applicant.
  • This page must be downloaded and submitted to the TIN Facilitation Centre along with the demand draft or cheque. Applicants can also complete their payment via net banking or debit/credit cards.

Applicants or entrepreneurs learning what is TAN number and its application method should note that they have to pay Rs.65 for their TAN registration. While this cannot directly help firms and companies to build their business brand, it can help with numerous tax benefits and exemptions.

  • Out of Rs.65 as the application fee for Tan registration, Rs.55 is the application charge while the rest constitutes of service tax which is now at 15%.

After learning about what is TAN number and how to apply for it, applicants should also note that not registering for this number can affect them in many ways. 

As mentioned before, availing lines of credit can be difficult without this document since tax return documents cannot be produced without TAN.

Numerous NBFCs like Bajaj Finserv and others offer business loans for companies which can be availed easily with the required documents.

TAN is an essential document for every individual allowed to collect or deduct income tax at source. After acquiring a detailed knowledge on what is TAN number, every registered individual should also check the few tax benefits which are offered for those with TDS and TCS. As tax saving tips for small business owners, this can especially be of aid.

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