Why it is Important to Know your TAN Number: For Online and Offline Business

As per a recent analysis by the Central Board of Direct Taxes in India, the total number of tax exemptions claimed by individual taxpayers for the assessment year of 2018-2019 amounted to Rs.4.45 lakh crore. 

Those belonging just above the income tax slab of Rs.5 lakh filed the most tax returns during the said assessment year.

This indicates that there are several authorised individuals or firms who are collecting or deducting or paying taxes as per mandates. However, in order to perform such actions, you need to know your TAN.

What is TAN, and why is it important to know it?

TAN or Tax Deduction and Collection Account Number is a 10 digit alphanumeric figure, issued by the Income Tax Department of India to an individual, firm, company, etc. who is required to collect or deduct tax at source.

As per the governing body, tax collectors need to quote their TAN for the following cases –

  1. While Filing TDS or TCS returns.
  2. In challans for TDS or TCS payments.
  3. Tax deduction certificates.
  4. Statements of suspicious accounts or transactions.
  5. Other official documents which require TAN.

As a tax collector, if you are unable to provide your TAN or quote an incorrect Tax Deduction and Collection Account Number, you may be charged with a penalty of Rs.10,000.

How can you apply for TAN?

In order to become an authorised tax collector, you need to know how to apply for TAN. One can apply for TAN both online and offline; the online method requires you to go through the application process in the official NSDL-TIN website whereas the offline procedure involves applicants in visiting the nearest TIN Facilitation Centres.

Consider the following steps to apply for your TAN –

. For online method –

  1. Visit the official website of NSDL-TIN.
  2. Click on ‘TAN’ under the ‘Services’ drop-down menu.
  3. Next, select the ‘Apply Online’ option, which will redirect you to a new page.
  4. Select the ‘New Tan’ option and navigate to the ‘Category of Deductors’ tab.
  5. Click on ‘Select’, and you will be redirected to another page where you need to fill up Form 49B online.
  6. Provide your personal details along with the documents required for TAN application and click on ‘Submit’ after filling up the form.
  7. On confirmation, you will be provided with an acknowledgement screen which comprises the following information –
  1. 14 digit acknowledgement number.
  2. Name of the applicant.
  3. Contact and payment details.

Applicants need to make a note of the acknowledgement number and preserve for future reference. 

A printout of the above information along with other necessary documents needs to be sent to the official address of NSDL e-Governance Infrastructure Limited.

. For offline method

  1. Visit the nearest branch of a TIN Facilitation Centre and obtain the TAN application form, i.e. Form 49B.
  1. Fill up the form and submit it along with the necessary documents required for a TAN application.

For both the above TAN application methods, applicants are required to pay a certain processing fee. Moreover, if the TAN applicant is a firm or a company who is not registered under the Companies Act 2013, the application must be made through Form INC-7.

The TAN is an essential inclusion for employers who are required to file their annual tax returns. So, as an employer, you are not only required to know your TAN but also need to know everything about professional taxes and related information in order to manage the required payments and finances with ease.

The TAN details will also be necessary for businesses to look for common options for financing. Most financial institutions in the country offer both long and short-term loans for companies and firms to meet their monetary requirements.

Reputed NBFCs such as Bajaj Finserv offers Business Loans at affordable interest rates and with minimal documentation.

This NBFC also brings forth pre-approved offers which make availing such credits quick and easy.

The TAN has helped in introducing a standardised system which has enabled the Central Government of India to deduct and collect taxes at source accurately. 

Hence, as a tax collector, you get to understand how important it is to know your TAN. Make sure to follow up on all the necessary pointers and accurately file the returns or claim exemptions.