{"id":5365,"date":"2022-05-11T07:26:17","date_gmt":"2022-05-11T07:26:17","guid":{"rendered":"https:\/\/www.indifi.com\/blog\/?p=5365"},"modified":"2024-05-29T11:25:35","modified_gmt":"2024-05-29T11:25:35","slug":"what-is-tan-and-its-importance","status":"publish","type":"post","link":"https:\/\/www.indifi.com\/blog\/what-is-tan-and-its-importance\/","title":{"rendered":"What Is TAN? &#8211; Application Process, Eligibility Criteria &#038; Importance"},"content":{"rendered":"<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/www.indifi.com\/blog\/wp-content\/uploads\/2022\/05\/TAN-Number-500x211.jpeg\" alt=\"\" class=\"wp-image-5367\" width=\"868\" height=\"366\" srcset=\"https:\/\/www.indifi.com\/blog\/wp-content\/uploads\/2022\/05\/TAN-Number-500x211.jpeg 500w, https:\/\/www.indifi.com\/blog\/wp-content\/uploads\/2022\/05\/TAN-Number-768x324.jpeg 768w, https:\/\/www.indifi.com\/blog\/wp-content\/uploads\/2022\/05\/TAN-Number.jpeg 1193w\" sizes=\"(max-width: 868px) 100vw, 868px\" \/><\/figure><\/div>\n\n\n<p><\/p>\n\n\n\n<p><strong>Table Of Content<\/strong><\/p>\n\n\n\n<ul>\n<li>What is a TAN?<\/li>\n\n\n\n<li>Importance of TAN for an individuals.<\/li>\n\n\n\n<li>Eligibility To Apply for TAN<\/li>\n\n\n\n<li>How to Check the status of TAN Application?<\/li>\n<\/ul>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_67_1 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.indifi.com\/blog\/what-is-tan-and-its-importance\/#What_Is_A_TAN\" title=\"What Is A TAN?\">What Is A TAN?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.indifi.com\/blog\/what-is-tan-and-its-importance\/#Importance_of_TAN_For_Individuals\" title=\"Importance of TAN For Individuals\">Importance of TAN For Individuals<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.indifi.com\/blog\/what-is-tan-and-its-importance\/#Importance_of_TAN_For_Businesses\" title=\"Importance of TAN For Businesses\">Importance of TAN For Businesses<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.indifi.com\/blog\/what-is-tan-and-its-importance\/#Eligibility_To_Apply_For_TAN\" title=\"Eligibility To Apply For TAN\">Eligibility To Apply For TAN<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.indifi.com\/blog\/what-is-tan-and-its-importance\/#How_To_Check_Status_of_TAN_Application\" title=\"How To Check Status of TAN Application?\">How To Check Status of TAN Application?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.indifi.com\/blog\/what-is-tan-and-its-importance\/#FAQ\" title=\"FAQ\">FAQ<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Is_A_TAN\"><\/span><strong>What Is A TAN<\/strong>?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Tax Collection Account Number, or in short, TAN, is a ten-digit unique number generated for Indian residents by the NSDL (National Securities Depositories Limited) on behalf of the Central Government of India that allows them to reduce\/collect taxes on any cash or cash-based transactions that they are involved in. This allows individuals and businesses to assess the total tax paid to others and set it off with the total tax collected from other businesses.&nbsp;<\/p>\n\n\n\n<p>In India, the Central Government&#8217;s Income Tax department assigns a <strong>10-digit alphanumeric code <\/strong>to individuals responsible for collecting Tax at Source (TCS) or deducting Tax at Source (TDS). This unique code, known as TAN, is mandatory to mention on all TDS returns filed, as per Section 203A of the Income Tax Act, 1961. Know why<a href=\"https:\/\/www.indifi.com\/blog\/importance-of-income-tax-return-filing\/\"> income tax return filing is important<\/a>?<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Importance_of_TAN_For_Individuals\"><\/span><strong>Importance of TAN For Individuals<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>One may argue that a PAN Card would be sufficient to submit proof while estimating the tax liabilities of individuals. However, different categories of people require different documents while submitting for tax audits, and PAN Card is just one component of it. Learn how to <a href=\"https:\/\/www.indifi.com\/blog\/how-to-download-e-pan-card-online\/\">download e-Pan Card<\/a>?<\/p>\n\n\n\n<p>NRIs (Non-Resident Indians) may require the TAN if they are involved in transactions with Resident Indians or other NRIs. For example, a resident Indian purchasing a property from an NRI would be required to submit the Tax Deducted at Source and Tax Collected at Source documents to the Government. A property transaction whose value is above Rs. 50 lakhs would lead to a 1% tax exemption deduction at source as per the Income Tax Law. Thus, to submit proof of this exemption and deduction upon transfer of property ownership, the buyer (Indian) would be obliged to own a TAN.<\/p>\n\n\n\n<p>When two NRIs are involved in a similar transaction, appropriate evidence regarding the transfer of money in INR needs to be submitted to the Government; and this is facilitated with the help of a tax break document filled up using Form 16A (under the Income Tax Law). Similarly, a property being sold by an Indian resident to an NRI mandates the latter to submit necessary documents to prove that the monetary transactions were done in INR, and a TAN would be necessary to fulfill this process.&nbsp;<\/p>\n\n\n\n<p>Also Read: <a href=\"https:\/\/www.indifi.com\/blog\/everything-msmes-need-to-know-about-gst\/\" target=\"_blank\" rel=\"noreferrer noopener\" title=\"https:\/\/www.indifi.com\/blog\/everything-msmes-need-to-know-about-gst\/\">Everything MSME&#8217;s Need To Know About GST<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Importance_of_TAN_For_Businesses\"><\/span><strong>Importance of TAN For Businesses<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The tax collected by vendors and suppliers in India is GST (Goods and Services Tax). The concomitant TDS (or TCS) is linked to the TAN to estimate and set off the Output GST and Input GST. MSMEs (Micro, Small, and Medium Enterprises) in India must apply for their TAN by filling up Form 49B, as required by the Indian Income Tax Law. This form is available at the NSDL portal. The NSDL serves as the mediator between the Government of India and MSMEs to ascertain the final set-off tax amount(s), considering the various combinations of Input\/Output GST and Integrated\/State\/Central GST.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><a href=\"https:\/\/www.indifi.com\/msme-loans\"><img decoding=\"async\" loading=\"lazy\" width=\"500\" height=\"91\" src=\"https:\/\/www.indifi.com\/blog\/wp-content\/uploads\/2022\/05\/MSME-Loan-3-500x91.jpg\" alt=\"MSME loan for Wholesalers\" class=\"wp-image-5351\" srcset=\"https:\/\/www.indifi.com\/blog\/wp-content\/uploads\/2022\/05\/MSME-Loan-3-500x91.jpg 500w, https:\/\/www.indifi.com\/blog\/wp-content\/uploads\/2022\/05\/MSME-Loan-3.jpg 716w\" sizes=\"(max-width: 500px) 100vw, 500px\" \/><\/a><\/figure><\/div>\n\n\n<p>Different payment methods (Demand Draft, Cheque, NEFT, and RTGS) have different levels of charges associated with them. The final tax consideration can also be exempted when possessing a TAN. Know <a href=\"https:\/\/www.indifi.com\/blog\/cancelled-cheque\/\">what is cancelled cheque<\/a>? Similarly, any receipt of rent exceeding Rs.1,80,000 and paying a professional a fee of more than Rs.30,000 would be subject to tax deduction at the source (TDS), and the same would be linked with the TAN, thereby ensuring transparency and smooth linkage of the transactions for audit and estimation purposes.<\/p>\n\n\n\n<p>Also Read: <a href=\"https:\/\/www.indifi.com\/blog\/new-gst-rates-in-2022\/\" target=\"_blank\" rel=\"noreferrer noopener\" title=\"https:\/\/www.indifi.com\/blog\/new-gst-rates-in-2022\/\">New GST Rates In 2022<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Eligibility_To_Apply_For_TAN\"><\/span><strong>Eligibility To Apply For TAN<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The primary stakeholders of TAN are organizations, NRIs, and any parties involved in a transaction that requires the submission of proof of TDS to the Government of India. If the amount payable to a resident is more than Rs.50,000 a month, then a TAN is mandatory. In addition, Section 194M of the Income Tax Act, 1951 allows an annual tax deduction of 5% at the source on consideration of contractual work. Taxes on commission or brokerage fees can be deducted if the principal amount exceeds Rs. 50 lakhs.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><a href=\"https:\/\/www.indifi.com\/business-loan\"><img decoding=\"async\" loading=\"lazy\" width=\"500\" height=\"91\" src=\"https:\/\/www.indifi.com\/blog\/wp-content\/uploads\/2021\/09\/Business-Loan-500x91.jpg\" alt=\"Business-Loan\" class=\"wp-image-4591\" srcset=\"https:\/\/www.indifi.com\/blog\/wp-content\/uploads\/2021\/09\/Business-Loan-500x91.jpg 500w, https:\/\/www.indifi.com\/blog\/wp-content\/uploads\/2021\/09\/Business-Loan.jpg 716w\" sizes=\"(max-width: 500px) 100vw, 500px\" \/><\/a><\/figure><\/div>\n\n\n<p>However, there are some rules associated with the applications of TAN in India. A business entity or an individual cannot use more than one TAN. If a company uses many TAN(s), the one that had been utilized the most number of times would be considered valid, while the other TAN(s) would be considered null or void and thus terminated. On the other hand, different branches of a business entity are mandated to maintain and utilize their TAN when they involve themselves in financial transactions with vendors, suppliers, customers, contractors, and employees.&nbsp;<\/p>\n\n\n\n<p>There are various Points of Contact (POC) to get a TAN through online portals. One such platform is Indifi Technologies Private Limited (<a href=\"https:\/\/www.indifi.com\/\"><strong>https:\/\/www.indifi.com\/<\/strong><\/a>). They help businesses get a head start by providing them with <a href=\"https:\/\/www.indifi.com\/business-loan\" title=\"https:\/\/www.indifi.com\/business-loan\" target=\"_blank\" rel=\"noreferrer noopener\">business loans<\/a> and credit facilities at low-interest rates and supplement the procurement of a Tax Deduction Account Number (or Tax Collection Account Number) to facilitate the setting-off of TDS and TCS.<\/p>\n\n\n\n<p>Also Read: <a href=\"https:\/\/www.indifi.com\/blog\/gstin-what-is-gstin-number-check-verify-gstin-uin-number-online\/\" target=\"_blank\" rel=\"noreferrer noopener\" title=\"https:\/\/www.indifi.com\/blog\/gstin-what-is-gstin-number-check-verify-gstin-uin-number-online\/\">GSTIN: What Is GSTIN Number? \u2013 Check &amp; Verify GSTIN\/UIN Number Online?<\/a><\/p>\n\n\n\n<p><strong>The Process to be Followed When Applying for TAN on NSDL<\/strong><\/p>\n\n\n\n<ul>\n<li>Type and enter <strong>https:\/\/www.tin-nsdl.com\/<\/strong> on the URL of any search engine<\/li>\n\n\n\n<li>Secondly, click on the \u2018Services\u2019 dropdown and select \u201cTAN\u201d from the list.<\/li>\n\n\n\n<li>Click on \u201cApply Online\u201d to enter the required credentials<\/li>\n\n\n\n<li>Click on \u201cNew TAN\u201d<\/li>\n<\/ul>\n\n\n\n<p>At this stage, you will be redirected to a new page.<\/p>\n\n\n\n<ul>\n<li>Click on the list of \u201cCategory of Deductors\u201d and click on \u201cSelect\u201d<\/li>\n<\/ul>\n\n\n\n<p>Now, you will be viewing Form 49B.<\/p>\n\n\n\n<ul>\n<li>Fill in the form and click on \u201cSubmit\u201d<\/li>\n<\/ul>\n\n\n\n<ul>\n<li>To check the status of your TAN Application, open the NSDL e-Gov-TIN portal. Click on the \u201cStatus Track\u201d option and enter the 14-digit unique acknowledgment number you would have received after 3 days of your application date.<\/li>\n<\/ul>\n\n\n\n<p><strong>Note: <\/strong>Be ready with all the necessary documents whose details would be required compulsorily by the form, such as Aadhar Card, PAN Card, and Address-Proof documents.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_To_Check_Status_of_TAN_Application\"><\/span>How To Check Status of TAN Application?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><br>After applying, the applicant will have a 14-digit acknowledgement number.<\/p>\n\n\n\n<p>Visit the official portal<br>Select the option \u2018TAN\u2019<br>Click on the option \u2018Know Status of Application\u2019<br>Select the type of applicant type<br>Give your acknowledgement number<br>Enter captcha<br>Click on the option \u2018submit\u2019<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQ\"><\/span><strong>F<\/strong>AQ<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol>\n<li><strong>Where can I obtain the TAN form?<\/strong><\/li>\n<\/ol>\n\n\n\n<p>The form can be downloaded for free from the NSDL website.<\/p>\n\n\n\n<ol start=\"2\">\n<li><strong>Can I make my own template for Form 49B on paper?<\/strong><\/li>\n<\/ol>\n\n\n\n<p>No, the document needs to be printed and filled in as structured by NSDL.<\/p>\n\n\n\n<ol start=\"3\">\n<li><strong>Should TAN codes be obtained separately for TCS and TDS?<\/strong><\/li>\n<\/ol>\n\n\n\n<p>No, only one TAN code is required to be utilized for both TCS and TDS.<\/p>\n\n\n\n<ol start=\"4\">\n<li><strong>What can I do if I cannot fill Form 49B completely?<\/strong><\/li>\n<\/ol>\n\n\n\n<p>The TIN-FC staff will help you complete the form if you request them to assist you with the same.<\/p>\n\n\n\n<ol start=\"5\">\n<li><strong>Can TAN be applied online and offline?<\/strong><\/li>\n<\/ol>\n\n\n\n<p>Yes, there are two different procedures that can be followed to apply for TAN through offline and online modes.<\/p>\n\n\n\n<ol start=\"6\">\n<li><strong>Why is TAN compulsory?<\/strong><\/li>\n<\/ol>\n\n\n\n<p>TAN is compulsory while filing for TDS\/TCS Returns, TDS\/TCS Challan, and TDS\/TCS Certificate.<\/p>\n\n\n\n<p>    7. <strong>What are the type of TAN?<\/strong><\/p>\n\n\n\n<p>There are two major types of TAN applications, and they are:<\/p>\n\n\n\n<ul>\n<li>Application for issuance for a new TAN.<\/li>\n\n\n\n<li>The form for change or correction in TAN for alloted TAN.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Table Of Content What Is A TAN? Tax Collection Account Number, or in short, TAN, is a ten-digit unique number generated for Indian residents by the NSDL (National Securities Depositories Limited) on behalf of the Central Government of India that allows them to reduce\/collect taxes on any cash or cash-based transactions that they are involved [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":5367,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[141],"tags":[],"_links":{"self":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts\/5365"}],"collection":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/comments?post=5365"}],"version-history":[{"count":9,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts\/5365\/revisions"}],"predecessor-version":[{"id":10072,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts\/5365\/revisions\/10072"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/media\/5367"}],"wp:attachment":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/media?parent=5365"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/categories?post=5365"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/tags?post=5365"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}