TAN for Deductors

 TAN for Deductors

Allotment of TAN Number:

The Deductors before deducting TDS must be allotted with TAN Number, Tax Deduction, and Collection Account Number. It is given in Section 203A of the Income Tax Act. It is basically a unique ten-digit alphanumeric number mandatory to quote on all TDS statements. 

Tax Deduction by Tax Payers:

However, there are provisions for taxpayers also to deduct tax and deposit to the income tax department. For example, under sections 194-IA, 194-IB, and 194M.

In Section 194-IA, the individuals who transfer valuable immovable property to another individual requires to deduct TDS and submit the same. However, if the immovable property is agricultural land, then this provision is not applicable.

In Section 194-IB, if an individual is paying more than Rs. 50,000 as rent to the owner of the house, then it is required to deduct TDS @5% from the rent.

In Section 194M, if an individual pays more than Rs. 50 Lacs in a year for payment of any contractual work or commission or brokerage or professional fees; then it is required to deduct TDS @5% from such payments and deposit the same in the income tax department. 

Basic Functions of Deductors

For Deductors, it is mandatory to quote their Tax Deduction and Collection Account Number in the TDS returns, challans, and TDS Certificates. 

Penalty for nonmentioning of TAN:

If Deductors fail to mention the TAN number, there is a penalty under section 272BB of Rs. 10000.

In the case of GSTIN for Deductors also, it is required to mention GSTIN on TDS on GST Returns, Challans, and Certificates.

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