What is TAN?
In India, a Tax deduction Account Number or Tax collection Account Number is a 10 digit alphanumeric number compulsorily issued, to any business organization or individual that is required to deduct or collect taxes on payment made or payment collection as sources, while making specific payments as salary, rent, etc. Or collections of specific payment like scrap sales more than the specified amount defined in the Income Tax Act, 1961. It is mandatory to mention on TDS/TCS return and TDS/TCS payment challan.
Who Should Start this
1) Every organisation is requires to deduct tax at source while making certain payments like salary, payments to contractor or payment of rent exceeding specified limit for single transaction or per year and requires to collect tax on collection of specified receipts like sale of scrap.
2) Branches of businesses making specified payments above the collective threshold limits of whole organisation.
3) Individuals or HUF is liable to deduct tax who cover under Tax Audit under section 44AB.
4) Individual or HUF is liable to deduct Tax on payment of Rent of land or building or both more than the specified limit in the Income tax Act, 1961.
