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What Exactly is TAN Registration And How Can It Help You?

A Tax Collection Account Number, or TAN, is a ten-digit unique number issued in India to those who are required by the Indian Income Tax Act of 1961 to reduce or collect taxes on amounts paid. The tax deducted at source or indirect taxes levied in India on cash payments made by assessments are classified as TAN. This enables the person who got the cash to claim the tax deducted at source as part of their overall revenue on their annual tax returns. Complete your TAN Registration in just a few simple steps from the Tax Help Desk, it offers one of the most reliable tax filing in India. Let’s dive into the blog to learn more.

If you have an MSME registration, the Indian Income Tax Law requires you to use a specific form (Form 49B) to apply for TAN, which you can fill out on the NSDL portal. Furthermore, the Government of India has appointed NSDL (National Securities Depositories Ltd) as the TAN registration intermediary.

In addition, no paperwork other than evidence of identity and proof of address is required during the application process. Furthermore, when applying for a TAN, you must provide to NSDL the printed confirmation received as well as address documentation.

TAN format

The TAN is structured as follows:

  • The first four characters are alphabetical, the next five words are numerical, and the last letter is still an alphabet. Here’s an example: ABCD12345E.
  • The first three characters identify the town or state where you obtained your TAN. The fourth character also expresses the first character of the deductor’s name.
  • The next five characters are numerical, with an alphabetic symbol in between.

TAN and non-resident

  • The TAN becomes relevant when a non-resident Indian sells his residence to a registered Indian. The buyer must determine whether the non-resident has a PAN. If the non-resident does not already have a PAN, they must apply for one.
  • Thanks to recent modifications to the income tax law, every property transaction worth more than Rs. 5 million now qualifies for a 1% tax exemption at the source. The buyer must pay 1% of the estate’s value and register it with the Indian government.
  • The buyer’s TAN- must be specified when reporting the tax deducted at the source. The TAN claim is not required if the estate is acquired from a citizen. If, on the other hand, you purchased the property from a non-resident, you will need the TAN.
  • Following the transfer of ownership, the buyer must submit the seller with a tax break paperwork completed on form 16A. A non-resident can also buy property from another non-resident. In this case, the need for TAN increases significantly.
  • TDS must be deducted and submitted to the Indian government by the non-resident buyer. This is also due to the fact that the transaction must be carried out in Indian rupees and cannot be carried out in a foreign exchange equivalent. In this case, the buyer will need to transfer funds from one Indian rupee bank to another, which will necessitate the use of a TAN.
  • When a non-resident buys land from a citizen, the TDS regulations apply once more. Furthermore, when a non-resident buys property from a resident, the transaction must be completed in Indian rupees. Furthermore, the tax exemption laws, as well as the resulting TAN, must be strictly followed.

TAN’s significance for organizations

  • A TAN number is an important identifier for firms when filing tax returns. The Indian government mandates all businesses, regardless of size, to apply for a TAN number.
  • The relevance of TAN can be understood by the fact that all firms are required to deduct tax at source (TDS) on payments made to suppliers, vendors, workers, or contractors that above a certain threshold.
  • There are different restrictions for different means of payment. A TDS deduction is required if the rent exceeds Rs 1,80,000 or the expert charge exceeds Rs 30,000. Companies that use these services are critical in these situations for deducting tax at the source, which mandates the use of a TAN number.
  • The most dependable TAN Registration services are provided by Tax HelpDesk. To learn more, go to the Tax HelpDesk website! It also offers other tax related services like tax filing in India or GST registration.

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