PAN & TAN

0
37

The income tax department issues various unique identification numbers, such as Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) to entities such as individuals, companies and trusts. While the assessees have to take the initiative in getting these issued, in many cases the PAN and TAN identities are mandatory.

PAN : is a 10-digit alphanumeric identity number issued by the income tax department. It enables the department to identify all the transactions of a tax assessee, such as: tax payment, tax returns, and specified transaction where PAN has to be quoted. It is essential for every individual to have a PAN, if the income earned during the year is taxable. Besides, any individual who is entitled to receive any income, after deduction of tax at source or who is liable to pay excise duty and so on, needs to have a PAN. Apart from that, for various cash transactions too, one has to furnish PAN or Form No. 60 if PAN is not available. In a recent move, the Central Board of Direct Taxes has made it mandatory for all account holders in banks and post offices to provide PAN or Form No. 60. Once obtained, PAN is valid throughout India and for the lifetime of the assessee. The PAN identity does not change even if the change involves address of the assessee or the assessing officer. However, any change in the details that were provided at the time of applying for the PAN, such as address, should be intimated to the department.
TAN: is also a 10-digit alpha numeric identity. However, only those who are responsible for deducting or collecting tax need to get a TAN. For instance, an employer who needs to deduct tax at source from employees’ income, needs to have a TAN. It is mandatory to quote TAN on all tax deducted at source returns. If it is not quoted, TDS or TCS returns will not be accepted by Tax Information Network-Facilitation Centres and the challans for TDS or TCS payments will not be accepted by banks. Failure to apply for TAN, or not quoting it in the specified documents, attracts a penalty of Rs.10,000.

According to the income tax rules, a property buyer has to deduct TDS at the rate of 1% of the property value if property value is above Rs.50 lakh. In such cases, the property buyer does not have to acquire a TAN to do so. Instead, she can mention her PAN while deducting and filing the TDS return.

LEAVE A REPLY

Please enter your comment!
Please enter your name here