Banking News Update

Sunday, January 9, 2011

TAN (Tax Deduction and Collection Account Number)

12:39 AM

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TAN (Tax Deduction and Collection Account Number)

1 What is TAN
TAN or Tax Deduction and Collection Account Number is a 10 digit alpha numeric number required to be obtained by all persons who are responsible for deducting or collecting tax. It is compulsory to quote TAN in TDS / TCS return (including any e-TDS / TCS return), any TDS / TCS payment challan and TDS/TCS certificates.

2 Who needs to apply for TAN? What law requires it to be obtained?
All those persons who are required to deduct tax at source or collect tax at source on behalf of Income Tax Department are required to apply for and obtain TAN.
The provisions of section 203A of the Income-tax Act require all persons who deduct or collect tax at source to apply for the allotment of a TAN. The section also makes it mandatory for TAN to be quoted in all TDS/TCS returns, all TDS/TCS payment challans and all TDS/TCS certificates to be issued. Failure to apply for TAN or comply with any of the other provisions of the section attracts a penalty of Rs. 10,000/-

3 How to apply for TAN
An application for allotment of TAN is to be filed in Form 49B and submitted at any of the TIN Facilitation Centres meant for receipt of e-TDS returns. The application form can be downloaded from the website of the Income Tax Department

4 What kind of documents are required to be sent with the application
No documents are required to be filed with the application for allotment of TAN. However, where the application is being made online, the acknowledgment which is generated after filling up the form will be required to be forwarded to NSDL.

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PAN (PERMANENT ACCOUNT NUMBER)

12:35 AM

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PAN (PERMANENT ACCOUNT NUMBER)

1 What is PAN
Permanent Account Number (PAN) is a ten-digit alphanumeric number allotted by Income Tax Department. Normally it is, issued in the form of a laminated card, by the IT Department.

2 Is it necessary to obtain PAN
It is mandatory w.e.f.1 January 2005 to quote PAN on challans for any payments due to Income Tax Department. Moreover, now it is mandatory to quote PAN on return of income, all correspondence with any income tax authority.

3 For which type of transactions it it necessary to quote PAN
In all documents pertaining to financial transactions notified from time-to-time by the Central Board of Direct Taxes.it is necessary to quote PAN. Some of the transactions where it is compulsory to quote PAN are as follows-
Sale and purchase of immovable property or motor vehicle;
Payments in cash, of amounts exceeding Rs. 25,000/-to hotels and restaurants;
In connection with travel to any foreign country.
For obtaining a telephone or cellular telephone connection.
For making a time deposit exceeding Rs. 50,000/- with a Bank Post Office;
depositing cash of Rs. 50,000/- or more in a Bank.

4 Who must have PAN
(a) All existing assesses or taxpayers or persons who are required to furnish a return of income, even on behalf of others, must obtain PAN.
(b) Any person, who intends to enter into financial transaction where quoting PAN is mandatory, must also obtain PAN.
(c) The Assessing Officer may allot PAN to any person either on his own or on a specific request from such person.

5. How to apply for PAN?
PAN application has to be made on Form 49A. It can be downloaded from website. Income Tax department has authorized UTI Investor Services Ltd (UTIISL) to set up and manage IT PAN Service Centers in all cities or towns where there is an Income Tax office and National Securities Depository Limited (NSDL) to dispense PAN services from TIN Facilitation Centers. For convenience of PAN applicants in big cities, UTIISL has set up more than one IT PAN Service Center and likewise there are more than one TIN Facilitation Centers.
To obtain PAN fast, one can also make application for fresh allotment of PAN through Internet pay througha 'nominated' credit card. In such cases the PAN is allotted on priority and communicated through email.

6 What are the documents to be submitted alongwith the Form 49A (application for PAN)
a. Individual applicants will have to affix one recent, coloured photograph (Stamp Size: 3.5 cms x 2.5 cms) on Form 49A; (A photograph is compulsory only in case of 'Individual' applicants')
b. Any one document listed in Rule 114 must be supplied as proof of 'Identity' and 'Address'; and
c. Designation and code of the concerned Assessing Officer of Income Tax department will have to be mentioned in Form 49A.

7 What type of documents are accepted as proof of address?
For Individuals: Following are some of the documents that are accepted as proof of address: (a) copy of electricity bill; or (b) telephone bill or (c) depository account or (d) credit card or (e) bank account or (f) ration card or (g) employer certificate or (h) passport or (i) voter identity card or (j) property tax assessment order or (k) driving license or (l) rent receipt or (m) certificate of address signed by a MP/ MLA/Municipal Councilor / a Gazetted Officer;
In case the PAN applicant is a minor, any of above documents of any of the parents or guardian of such minor shall serve as proof of Address;
For HUF: In case PAN application is made on behalf of a HUF, any of above documents in respect of Karta of the HUF will serve as proof of Address.
For Others e.g. Partnerships / Companies etc.: Copy of Certificate of Registration issued by the Registrar of Companies or Copy of Certificate of Registration issued by the Registrar of Firms or Copy of Partnership Deed or Copy of Trust deed or Copy of Certificate of Registration Number issued by Charity Commissioner or Copy of Agreement or Copy of Certificate of Registration Number issued by Charity Commissioner or Registrar of Co-operative Society or any other Competent Authority or any other document originating from any Central or State Government Department establishing Identity and Address of such person.

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