What is the "TAN Full Form" in Income Tax
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0 Full Form of TAN in income Tax
The TAN Full Form in Income Tax is Tax Deduction and Collection Account Number. It is the Indian income tax structure is founded on idea of collectors and deductors who tax withholding at the source of TDS/TCS on various transactions. In the United States, the Income Tax Department (ITD) provides a unique identifier known as tax deduction and collection account Number or TAN, in order to facilitate the process and to provide an accurate record of same. This article provides a clear understanding of the finer points and nuances of TANs that range from their definition to who needs one and why. It provides the essential information that must be adhered to.
What is a TAN?
Companies that collect or deduct tax at source receive 10 digit alphanumeric tax TANs from the ITD. With this unique identification of collectors and deductors the ITD is able to easily check TDS/TCS activities.
Who Needs TAN?
Not everyone needs TAN. TANs are required for businesses which take deductions of TDS on rent, wages and professional charges. Non-companies have to offer the TANs required for TDS on contractor payments as per the Income Tax Act, 1961. Deduct/collect HUFs require TANs. Local governments with TDS deductions require TANs.
Exceptions:
PAN could replace TAN to allow TDS deductions under Section 194IA (immovable property transactions) 194IB (taxable bond redemptions) as well as 194M (mutual fund sales).
The significance of TAN
The TDS/TCS requirements require TANs. The ITD requires you to mention your TAN on TDS/TCS statement such as refund forms, deposits challans and deductee certificates and other papers. Not mentioning or omitting the TAN could be the cause of the payment of a fine of up to Rs. 10,000 fine. Returns from TDS/TCS could be denied without the TAN.
