TAN stands for Tax Deduction and Collection Account Number. It is a ten digit alphanumeric number thats allotted to those who are supposed to deduct tax at source or TDS. TAN number or TAN Registration & GST Registrations is very important for businesses deducting tax at source and is required to be quoted in TDS or TCS return. proprietorship business and other entities (i.e., Private Limited Company, LLP, etc.,) must deduct tax at source while making certain payment like salary, payments to contractor or sub-contractors, payment of rent etc. On deducting tax at source, the entity registered for TAN will issue a TDS Certificate as proof of collection of tax.
Reasons to Register a TAN
Tax Deducted at Source must be paid into authorized bank, quoting the TAN and using Challan 281. TDS during the preceding month must be paid before the 7th day of the following month.
Proprietorship Require TAN
Salaried individuals are not required to deduct tax at source. However, individuals running a proprietorship are required to obtain TAN and deduct tax at source when required.
Once a TAN is issued, it is valid for lifetime. However, TDS Filings must be made quarterly on the 15th day of July, October, January and May. Non-filing of TDS filings within the due date will attract a penalty.