As per Section 203A of the Income Tax Act 1961, it is mandatory for all people or organizations (liable to deduct TDS) to quote the TAN details in all matters and correspondence related to TDS (such as TDS Returns, TDS Payments, Issuance of Form 16, etc.) with the Income Tax Department. Failure to do so will attract a penalty of Rs. 10,000. Also, banks do not accept TDS returns and payments, unless the deductor or depositor has a valid TAN.
Many a times, people assume that PAN and TAN are similar documents and can be used interchangeably. However, TAN is to be obtained separately by people, organizations or institutions that are responsible to deduct tax, even if they have a PAN.
The only exception is in the case of a buyer of an immovable property. In this case, the buyer or the deductor is not required to obtain TAN and can use PAN for remitting the TDS. The procedure for application of TAN is very easy and can be done online by filling up Form 49B
Time of Deduction
As per Section 192, tax on salary is to be deducted at the time of actual payment and not at the time of accrual of salary. Hence, if salary is paid in advance or arrears of salary are paid, then TDS is to be deducted at that time itself. For all other payments, TDS is to be collected at the time of payment or credit of income, whichever takes place before.
Online TDS Payment
The online TDS payment system was conceptualized to ensure that an integrated platform with end to end enabled services is accessible to the users with the philosophy of “Any Time, Any Where”. This has also made the TDS administration a user friendly and transparent process and has helped minimize tax frauds. This is one common platform wherein the deductors and taxpayers and assessing officers have access to the same data.
With the ever-increasing number of taxpayers in the country, digitalization is one of the most important pre-requisites for a speedy, accurate and stable ecosystem.