The most important resource of any organisation is its workforce. The greatest motivation for a person to work in any organisation is the salary he receives. An employee receives the salary under his Permanent Account Number (PAN) and the employer pays this salary under his Tax Deduction and Collection Account Number (TAN). The following article will give detailed information about the TAN.
Tax deduction and collection Account Number or commonly known as TAN is a 10 digit alphanumeric number required to be obtained by all persons who are responsible for deducting or collecting the tax. However, a person who is required to deduct tax under section 194-IA can use PAN in place of TAN as he is not required to obtain TAN. TAN is issued by the Income-tax Department to all persons who are responsible for deducting tax at source (TDS) or who are required to collect tax at source (TCS).
TAN is a number which is assigned to a person who is liable to deduct or collect tax at source. Whereas, PAN is a number which is issued to a person who earns income and is liable to pay taxes.
Mr Chinmay is the owner of the company, and Mr Greenio is the employee of the company. Therefore, as Mr Chinmay will be having a TAN as he is liable to deduct or collect tax at source and Mr Greenio will be having a PAN as he is liable to pay taxes. Also, Mr Chinmay will be having his PAN, as he is also liable to pay taxes collected to the government as well as taxes on his own income though he is the employer.
TAN has a set of its own legal framework which includes as follows.
As per Section 194IB of Income Tax Act, a person who is one of the following is eligible for allotment of a TAN:
As per Section 203A of Income Tax Act, the TAN is to be quoted in the following documents:
As per Section 272BB of Income Tax Act, there is a penalty of Rs 10,000 for the person who does not issue a TAN or has an incorrect TAN.
Income Tax department issues the TAN to an applicant after the National Securities Depository Limited (NSDL) assigns a TAN to the applicant.
The simplest way to apply for TAN is by using the online portal facility of the Tax Information Network
The TAN application form fees are Rs 55 along with 18% GST, which comes out to be Rs 65.
Following are the modes of payment:
In case of Cheque and Demand draft, the name of the applicant and the acknowledgement number should be written behind the same.
In case of Credit Card/ Debit Card/ Net Banking, the person from whose card/account the payment should be made is described below:
|Category of the Applicant||Authorised Person making payment using a credit card or debit card or net banking|
|Individual or Branch of Individual business||Self|
|Company or Branch or Division of a Company||Director of the Company|
|Hindu Undivided Family (HUF)||Karta|
|Firm or Branch of Firm||Partner of the Firm|
|Body of Individuals or Association of Persons or Association of Persons (Trusts) or Artificial Judicial Person||Authorised Signatory covered under Section 140 of the I-T Act, 1961|
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No! Same TAN card can be used for both TDS and TCS purpose. And for other payment like interest payment.
Addresses of all TIN-FC are available on NSDL-TIN website (https://www.tin-nsdl.com).
The status of application of TAN can be checked by visiting NSDL-TIN website or from income tax department website and clicking status track option and by quoting the unique 14-digit acknowledgement number after three days of the application.
Yes. The Government employers are also required to apply for TAN.
PAN can never be used in the field where TAN is required to be quoted. However, a person required to deduct tax under section 194-IA can use PAN in place of TAN as such person is not required to obtain TAN.
No. The employer cannot use more than one TAN. Different branches/ divisions of an entity may, however, have separate TAN.
You can make any change or correction in the information related with TAN by filing up “Form for changes or correction in TAN data for TAN allotted” along with necessary fees at any of the TIN-FCs or NSDL-TIN website.
A duplicate TAN is an excess TAN that an employer or deductor carries. Having a duplicate TAN is illegal.