TAN
Introduction
Under the Income-tax Act, every person making payment or crediting
income of specified types to another person is required to deduct
a specific proportion of amount payable/creditable at the time of
making payment or giving credit, whichever is earlier and deposit
the sum so deducted. Every such person shall have to apply to the
Assessing Officer for allotment of a tax deduction account number
(TAN) under section 203A.
How to apply for Tax Deduction Account Number (TAN)
All organizations which are required to deduct tax at source are
required to obtain TAN from the assessing officer by making an application
for the allotment of TAN in Form 49B (given below). It may be noted
that the function of allotment of TAN is centralized at the headquarters
of the Chief Commissioner in the metropolitan cities of Chennai,
Mumbai, Kolkata, Delhi, Ahmedabad, Bangalore, Hyderabad and Pune.
For other places, the function is decentralized with various assessing
officers. Now you can fill this application online also. Please
log on to https://tin.tin.nsdl.com/tan/form49B.html
Mandatory Nature of Provisions
Under Income-Tax Law, it is mandatory to apply and obtain TAN
if an organization is liable to deduct tax at source on certain
payments which are discussed in the following paras and the organization
deducting tax is required to quote the TAN in the following documents:
(i) All challans while depositing the tax so deducted.
(ii) All certificates issued against the tax deducted.
(iii) All returns furnished in respect of tax deducted at source.
(iv) All other documents pertaining to such transaction as may be
prescribed.
Types of Payments Requiring Tax Deduction At Source
Section 200 of the Act specifies a list of payments which require
deduction of tax at source. From the viewpoint of Voluntary Organizations,
following are the important payments, in respect of which tax must
be deducted at source:
| Nature of Payment |
Amount above which TDS willoperate
(in Rs.) |
Rate of Deduction |
CESS |
| Salary |
160,000.00 - Men
190,000.00 - Women
235,000 - Senior Citizen |
Average Rate |
3% |
Deposit of Tax Deducted At Source
The tax deducted at source is required to be deposited to the
credit of the Central Government within the stipulated time limit.
Such deposit can be made in various specified nationalized banks
with the help of TAN challans available with Income-tax Department.
Whenever a TDS is deposited one should not forget to quote the TAN
on challan.
The time limit for depositing the amount of TDS is as under:
(i) For salaries-within one week from the end of the month in which
deduction has been made.
(ii) For other payments-within one week from the end of the month
in which deduction has been made.
However, where the amount is credited on the last day of the year,
the tax amount can be deposited within 2 months from the date, except
in case of TDS on salary.
Issue of Certificate
Under section 203 the organization deducting TDS is required to
issue a certificate to the person from whose income, tax has been
deducted. This certificate will enable the person to claim credit
for such tax deducted in his/her return of income. Organizations
can prepare the certificate in their own stationery but in the prescribed
form. The prescribed form is Form No.16 (given below) for deduction
of tax from salary, for all other cases it is Form No. 16A (given
below). Form 12BA (given below) is a statement showing particulars
of perquisites, other fringe benefits or amenities and profits in
lieu of salary with value thereof.
RETURNS TO BE FURNISHED BY THE ORGANISATION
All organizations responsible for deduction of tax at source is
required to submit to the prescribed income tax authority; a return(s)
within a stipulated period after the end of the financial year.
The relevant return form and the month by which it should be filed
are as under:
| Types of Return |
Form No. |
Last date for Submission |
| Quarterly return for tax deduction from salaries |
24Q |
15th July, 15th October, 15th January and 15th June |
| Quarterly return of deduction of tax from payments other than
salaries |
26Q |
15th July, 15th October, 15th January and 15th June |
Interest, Penalties & Punishment
Failure to deduct income-tax at source on various payments as
discussed may attract interest, penalty and even severe punishment.
- If an organization does not deduct tax or deducts tax but does
not deposit the same then interest @ 1% per month would be levied
on the tax not deducted or not paid as the case may be, under section
201(1A).
- The Income Tax Department may also levy penalties to the extent
of the amount of tax not deducted in cases of failure to deduct
tax, under section 271C.
- If the tax is deducted but not deposited in favour of the Central
Government as per the provisions of the Income-Tax Act, then the
principal officer can be punished with imprisonment for a period
of 3 month to 7 years with fine.
- If the returns required to be furnished under section 206 are
not filed then a penalty of Rs. 100 per day may be imposed for each
day of default, under section 272A. However, the assessing officer
shall give an opportunity of being heard before imposing the penalty
under this section.
Forms Link
Calender09
Form16A
Form 12BA
Form 16
Form 24Q
Form 26Q
Form
49B for the application of TAN
TDS
rate a per new Finance Bill 2009
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