TAN stands for Tax deduction Account Number or Tax collection Account Number issued by Income Tax Department.
It is 10 digit alpha numeric number.
Every Assessee liable to deduct TDS is required to apply for TAN and shall quote this number in all TDS Returns, TDS payments and any other communications regarding TDS with Income Tax Department.
It is compulsory to quote TAN in TDS / TCS return (including any e-TDS / TCS return), any TDS / TCS payment challan and TDS/TCS certificates.
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Salaried Individuals are not required to deduct tax at source. However, individuals who run a proprietorship business are required to deduct tax at source. All other entities like LLP, Private Limited Company, Limited Company, Trust, Society, etc., are required to obtain TAN and deduct tax at source.
To obtain TAN, an application must be made in Form 49B at any of the authorized TAN Facilitation Center.
Tax deduction at source happens at different rates based on the transaction. TDS rate for salary is determined based on the employees’ salary and tax payable by the employee. The tax rate varies depending on the type of transaction. A rate of 10% is applicable for deducting TDS on rent of land, building or furniture if rent fir entire year exceeds Rs.1,80,000. See a complete list of TDS rates
15th of every July, October, January, and May are the due dates for filing quarterly TDS return. Any delay in furnishing your return will result in a penalty of Rs 200 per day not exceeding the total amount of TDS for the quarter.
Service tax payments must be deposited by Companies, Societies, Trust, etc., monthly. Proprietary Firms and Partnership Firms are required to make Service Tax payments quarterly.
If tax registration is not obtained then a penalty Rs 5000 Rs. 200 a day, whichever is higher may be attracted.