When you start a business and plan to recruit someone as an employee, you must obtain a TAN number. It all started with the CBDT’s (Central Board for Direct Taxes) pay-as-you-earn system, which was designed to provide the government with a consistent source of revenue. When an individual receives money, he is required to pay income tax to the government, and the only way to track this is to deduct tax at the source, which is why it is important for you (or everyone else) to have a TAN.
WHAT IS TAN?
The Tax Deduction Account Number is abbreviated as TAN. The number must be used if a person wishes to deduct in any TDS correspondence (Tax Deducted at Source). Individuals who are required to deduct tax on payments made by them under the Indian Income Tax Act, 1961 are given a TAN amount.
It is mandatory to quote the Tax Deduction Account Number (TAN) allotted by the Income Tax Department (ITD) in all TDS returns and Challans when depositing the tax in a specified bank under Section 203A of the Income Tax Act, 1961.
Another explanation is that if the TAN is not quoted, TDS returns from individuals will not be issued, and challans for TDS payments will not be approved by banks. If you do not apply for a TAN or do not use it in the necessary paperwork, you will be fined Rs.10, 000.
HOW TO APPLY FOR TAN ONLINE
- Go to https://tin.tin.nsdl.com/tan/index.html.
- Next, choose ‘online TAN application (Form 49B)’.
- Choose a deductor group from the drop-down menu.
- Pick the choice by pressing the ‘select button’;
- Fill out the form with the necessary information (Please fill all mandatory fields especially ones marked with a star).
- If any format level validation of the data submitted by you (applicant) fails, you will receive a response indicating the error (s).
- After correcting the mistake, you must resubmit the forms (s).
- If there are no form-level errors, a validation screen with the applicant’s data will be shown.
- Choose the edit option if you want to make any adjustments to the data in the confirmation screen.
- If the information displayed is right, select the confirm option.
- An acknowledgment slip will be provided following the effective payment of fees (if the mode of payment is not DD or check).
- After you’ve completed the application process, save and print the acknowledgment and mail it to NSDL along with the required documents at:
NSDL e-Governance Infrastructure Limited,
5th floor, Mantri Sterling,
Plot No. 341, Survey No. 997/8,
Model Colony,
Near Deep Bungalow Chowk,
Pune
Pincode: 411016.
The envelope should be super scribed as ‘APPLICATION FOR TAN – Acknowledgment Number’ (e.g. ‘APPLICATION TAN – 88301020000244’).
