The status of an organization regarding tax deductions or collections at the source in India is conditioned on the registration of its TAN. This is a unique 10-digit alphanumeric number that complies with the Income Tax Act, 1961. Such registration enables organizations to manage their tax deductions (TDS) and collections (TCS) efficiently, keeping proper records and simplifying their operations. In this all-encompassing article we will look into what Tan registration means, how to go about it, as well as the advantages thereby defining its importance to Corporates.
TAN Registration
As it were, the TAN registration is the process through which qualified entities can apply for and receive a Taxpayer Account Number. Following this, such an organization may legally retain or collect taxes at source and remit them to the state. This registration also dictates that all TDS/TCS transactions, returns, and other compliance documents must mention TAN.
Companies are exposed to penalties for tax-related activities without having a valid TAN. This enhances administration of taxes across the country whereby the Income Tax Department can monitor tax revenues and deductions with ease.
What is TAN Registration Number
The primary users of Tax Deduction and Collection Account Numbers (TANs), which are unique 10-digit alphanumeric numbers, are individuals or organizations tasked with collecting or deducting tax at the source (TDS/TCS).
Structure of TAN
The Tax Deduction and Collection Account Number’s digits each stand for distinct concepts. TAN is an alphanumeric number with an alphabetic prefix for the first four digits, five numeric digits after that, and a final alphabetic digit.
The Code of Jurisdiction is represented by the first three alphabets of the Tax Deduction/Collection Account Number; the initial letter of the fourth alphabet corresponds to the name of the TAN holder. A TAN holder may be an individual, business, or other entity. The final alphabet is chosen at random. The TAN number assigned to Mr. Atul of Bangalore, for example, might be BLR A 23456 M.
TAN Number- Definition and Configuration
The TAN Number, popularly known as the Tax Deduction and Collection Account Number, is a ten-character alphanumeric number that has a specific structure.
- First Four Alphabets: The first three letters of TAN show where it was issued from. The fourth one is kind of like an abbreviation for either the name of an organization or individual asking for TAN.
- Middle Five Digits (Number): The middle five digits are uniquely determined by the system.
- Last Symbol (Letter): The last symbol is a special letter generated by the system.
The value of obtaining a TAN Number
Any person or organization charged with the duty of deducting or collecting tax at source must apply for a TAN (Tax Deduction and Collection Account Number), in accordance with Section 203A of the Income-tax Act, 1961. Additionally, this section requires the TAN Number to appear in several papers.
The following documents should make clear the TAN:
- statements and returns pertaining to TDS (Tax Deducted at Source) or TCS (Tax Collected at Source).
- Challans concerning payments made to TDS or TCS.
- the certification of TDS or TCS being issued or presented.
- various paperwork and forms related to income tax filing and procedures.
Who Should Obtain a TAN ?
Entities that deduct taxes: Anyone or any organization that must deduct taxes at the source when doing certain operations, such as paying contractors, distributing salaries or paying rents exceeding Rs 1,80,000 every year.
- Organizations that are not profit-oriented: Organizations that pay some amounts exceeding some established values.
- Corporate divisions: Organizational units of companies making defined payments beyond predetermined limits.
- Salaried persons: They are not required to have TAN or withhold taxes at source.
Documents Needed for TAN Registration
- TAN Application Form
- Legal Document
- Passport Size Photograph
- Proof of Address for the Registered Office
- Company’s PAN Card
Mandatory TAN Allotment & Usage Under Section 203A of IT Act
Anyone who deducts or collects tax at source is required to apply for TAN allotment under Section 203A of the Income-tax Act, 1961. It is also required by Section 203A to cite TAN in the following documents:
- TDS statements i.e. return
- TCS statements i.e. return
- Statement of financial transactions/reportable accounts
- Challans for payment of TDS/TCS
- TDS/TCS certificates
- Other documents as may be prescribed
India’s TAN Registration Procedure: A Detailed Guide
In India, one can apply for a Tax Deduction and Collection Account Number (TAN) both online and offline. When doing it online, you get to enjoy instantaneous processing coupled with speeding up of the whole process while those who prefer paper-based application procedures can use the offline method. The two processes are explained in detail below:
simplifying TAN Registration
As to Tan registration, Auditor Shiva is well-known platform in India that streamlines various financial and business processes. Having profound understanding of Indian tax system, Auditor Shiva is able to help individuals and companies alike register for their Tan simply and successfully. Through Auditor Shiva, they receive guidance from experts who ensure accuracy and timely completion of procedures from completion of form 49B up until its final submission.
To add on, we keep our staff updated on the latest regulations and policies thereby ensuring that our clients are always compliant with the requirements of the Income Tax Department. For efficient and easy TAN registration, consult our experts today!
Offline TAN Registration process
The filing Form 49B, TAN allotment application and send along with the required charges to any of Protean TIN-Facilitation Centre (TIN-FC) for manual process.
Moreover, NSDL website can provide a TAN online application which could be filled up by the individual and submitted at TIN-FC with the requisite payment.
Online TAN Registration process
The TAN application can be submitted through NSDL website by interested individuals easily from this. If you want it to be processed, ensure you read through carefully the instructions, accurately fill out the online TAN application form and submit it electronically.
PAN: One needs to provide their PAN (Permanent Account Number) registration number in the application. Irrespective of whether there is an outdated format for tax collector or deductor’s account number, PAN serves as an essential identifying marker. Hence, it is always advantageous to undertake online TAN Registration simultaneously with online PAN Registration.
Remember that TAN is a vital identification for tax transactions and compliance; therefore regardless of whether you choose an online or offline approach, verifying correctness of submitted information remains very important.
How to Track TAN Status
- Visit the NSDL (Protean) website
- Under the Services section, click on “TAN”
- On the next page, click on “Know Status of Your Application”
- Select the application type as TAN
- Enter the acknowledgement number, the captcha code and click on “Submit” to know the status of the TAN application.
Features of TAN Registration
Tax Deduction and Collection Account Number (TAN) is vital for those responsible for withholding or collecting taxes at source. Some major characteristics of TAN registration number are as follows:
- A lifetime validity: Once obtained TAN is valid for life time. It means that no individual or organization is required to renew or apply for it at intervals.
- Obligatory when making TDS payments: The TAN must be quoted when paying Tax Deducted at Source (TDS) to an authorized bank. Without a TAN, one cannot deposit TDS money into any bank.
- Require by only one owner: Even if an individual runs a sole proprietorship and is liable to deduct taxes at the source they must acquire TAN. This further highlights the importance of TAN not only to small businesses but also to big corporations as well.
- Unique identifier: TAN is a 10-digit-alphanumeric code that is unique. The Income Tax Department has developed this special number for individuals or organizations responsible for withholding or collecting taxes at source.
Online TAN Verification Process
Tax can be collected and deducted from individuals who are liable for tax deduction/collection (TAN). Therefore, people explicitly responsible for tax deductions or collections on payments need to know their TAN deduction/collection account number. Using either the firm name or TAN, one can easily verify TAN details using the online “Know Your TAN” tool run by the Income Tax Department. The verification procedure is quite simple and straightfoward.
Benefits of TAN Registration and Verification
- The deductor can readily get correspondence on Tax collected at source (TCS) and Tax Deducted at Source (TDS) from the Income Tax Department by accessing the database of current, active TAN details.
- There will be an authenticated login area for each deductor.
- Deductors will also have previsions or privileges to get the newest Input file (FVU) for the purpose of producing a corrective statement and check the challan status online.
- A statement outlining the tax deducted at source (TDS) status and the reconciliation of TDS to TAN holders in relation to Section 200A is available to the deductor.
- Online uploading of Tax deducted at source (TDS) returns is simple for the deductor.
Advantages of TAN
- Certainty of Legal Compliance: For every organization which has responsibility for tax deduction or collection it is a must to get Tax Deduction and Collection Account Number (TAN). Failure to do so may result in legal actions or penalties for not complying with tax regulations. It ensures adherence to taxation requirements as well.
- Efficiency in Tax Operations: If you have TAN, then your systems for deduction and collection of taxes will be more efficient. This would minimize mistakes or delays since the way is paved for accurate and timely deduction of taxes as well as filing them with the government.
- Simple Monitoring and Reconciliation: TAN allows us an easy way to track tax transactions and reconcile them too. Your TDS/TCS records along with certificates can be accessed easily which prove that proper amounts were deducted from taxes paid by the taxpayers on returns filed within due course of time Hence this systematic approach enhances regulatory compliance while making it easier to monitor the taxation transactions.
Conclusion
TAN is important for tax deduction and collection, that’s business or organization should secure it. For easy tax compliance and efficient tax operations, TAN has unique identification features, lifetime validity and it is mandatory for TDS/TCS transactions. Additionally, it helps entities avoid legal penalties, improve tax monitoring, and facilitate the smooth reconciliation of tax returns. It doesn’t matter whether you opt for an online or offline registration process; what really matters is how accurate the information you provide is. However, AuditorShiva makes this easier by providing expert assistance across all stages of registration.
Make your business tax-compliant with the help of Auditor Shiva! Our experts will guide you through the easy TAN registration process. Get started today for smooth tax operations and legal protection. Visit https://auditorshiva.com/pan-tan-registration/ or call +919244623455 to get expert help now!
