TAN Card: You know about PAN Card, but what is TAN Card? Know here..

PAN Card...This 10-digit number is the biggest proof of our financial identity today. From opening a bank account, filing Income Tax Return (ITR), buying property, and making big transactions, a PAN card is required everywhere. But have you ever heard of a TAN Card?

Most common people do not know about it, but if you are running a business, own a company, or deduct tax while making payment to someone in any way, then this TAN number is as important for you as a PAN card, or even more important than that. Let us understand today what this TAN is and who uses it.

What is a TAN number?
The full form of TAN is Tax Deduction and Collection Account Number.
This is also a 10-digit alphanumeric number issued by the Income Tax Department.

Its purpose is to identify all those persons or institutions who are responsible for making Tax Deducted at Source (TDS) or Tax Collected at Source (TCS).

In simple words, if you are making any payment to someone and it is your responsibility to deduct tax on that payment and deposit it with the government under the law, then you must have a TAN number.

What is the big difference between PAN and TAN?

The Income Tax Department issues both a PAN card and a TAN card. Both have a ten-digit number. But both are used for different people. It is necessary for those who pay tax to get a PAN card because they have to fill in this 10-digit number while paying tax. Apart from this, the government also uses PAN to monitor the large transactions made by you. On the other hand, a TAN number is necessary for those who deduct tax. TAN number is very important in all documents related to TDS.

For whom is it mandatory to take TAN?

According to section 203A of the Income Tax Act, 1961, every person or organization that deducts TDS will have to obtain a TAN. This includes:

All companies (private and public limited)

Partnership firms

Sole Proprietorship

Hindu Undivided Families (HUF)

Trusts and societies

Central and state government departments

People who are required to get their accounts audited (such as doctors, lawyers, whose income is above a limit).

What will happen if TAN is not taken?

Deducting or depositing TDS without a TAN number is a serious offense.

TDS will not be deducted: If you do not have a TAN, the bank will not accept your TDS challan.

Heavy penalty: Under Section 272BB(1) of the Income Tax Act, not applying for TAN or giving a wrong TAN can attract a penalty of Rs 10,000.

How to apply for TAN?

Applying for TAN is very easy. Just like a PAN card, a TAN card can be made both online and offline. For this, you have to fill out Form 49B and pay a nominal fee. You can keep an online credit card, a demand draft, cheque, or net banking as the mode of payment. To get TAN card made online, you can apply by visiting the website of NSDL (National Securities Depository Limited). TAN card will be delivered to your home within 15 days of applying.

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