Do i need a TAN from Income Tax department? - Professionals - Taxation - TIK Share
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Do i need a TAN from Income Tax department?


Rahul Rai

2014-04-12

When does one need to obtain a TAN number from Income Tax department?

What are the conditions/rules that requires one to have TAN?

If one does not have TAN, even than one need to deduct tax at Source (TDS)?

What if i dont have TAN and i dont deduct tax at source (TDS)?

What are the situations under which even if tax is deducted, TAN is not required?

CA Pulkit Sharma

2014-04-12

TAN is compulsory if someone deducts tax, subject to few exemptions.

So the question now is, Who need to deduct tax at source (TDS)?

Tax need to be deducted if you are paying money to your vendors in excess of limits specified under Income Tax Act 1961 and rules.

Example: If you are paying more than 30,000 in a year to some consultant. Tax need to be deducted at 10%.

However, if your are an Individual and you are not covered under section 44AB (Tax Audit) than you dont have to deduct tax.

If you are paying to some foreign vendor for receipt of services, than TDS has to be deducted and you need PAN.

Now coming to your questions:

When does one need to obtain a TAN number from Income Tax department?

One need to get TAN if you have to deduct tax at source (TDS). However its optional and can get TAN.

What are the conditions/rules that requires one to have TAN?

Section 203A makes it compulsory to have TAN number to file the quarterly statements.

If one does not have TAN, even than one need to deduct tax at Source (TDS)?

If TDS is to be deducted you should have TAN to file the quarterly statements. However if you dont have TAN at the time of deduction, you should apply for TAN within 1 month from end of the month in which tax was deducted. (Section 203A)

What if i dont have TAN and i dont deduct tax at source (TDS)?

You will be considered as a default assessee by IT department. All the expenses on which TDS was to be deducted will disallowed while filing the income tax returns. The result of disallowances is that you will end up paying tax on all the amounts on which TDS was to be deducted but not deducted.

What are the situations under which even if tax is deducted, TAN is not required?

No TAN is required if TDS is deducted on purchase of immovable property whose value is more than 50 Lakh. In all other cases you need to have TAN.

hen does one need to obtain a TAN number from Income Tax department? - See more at: http://www.tikshare.com/forum/showPost/775/Do-i-need-a-TAN-from-Income-Tax-department?#sthash.L3IUXdHy.dpuf

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