TAN or Tax Deduction and Collection Account Number (TAN) is a 10digit alphanumeric number issued to persons who are required to deduct or collect tax on payments made by them under the Indian Income Tax Act, 1961. The person deducting the tax at source is required to deposit the tax deducted to the credit of Central Government - quoting the TAN number.
Persons eligible to obtain the TAN number:-
Individuals who are salaried are not required to obtain TAN or deduct tax at source. However, a proprietorship business and other entities (i.e., Private Limited Company, LLP, etc.,) must deduct tax at source while making certain payment like salary, payments to contractor or sub-contractors, payment of rent exceeding Rs.1,80,000 per year, etc.
Process of application
The TAN number can be obtained online or offline by applying Form 49B with the related documents and prescribed fees.
Rates of TDS
Tax deduction at source happens at different rate based on the transaction. TDS for salary is determined based on the employees' salary and tax payable by the employee. TDS rate of 10% is adopted for rent of land, building or furniture if the annual rent exceeds Rs.1,80,000/-. The complete list of TDS is as follows:
|
Section |
For Payment of |
On Payments Exceeding |
Individual/HUF |
Others |
|
192 |
Salary |
Minimum amount not chargeable to Tax |
As per Slab Rate |
|
|
193 |
Interest on Debentures/Securities |
Rs. 5000/- |
10% |
10% |
|
194 |
Deemed Dividend |
No Minimum |
10% |
10% |
|
194A |
Interest other than on securities by banks |
Rs. 10000/- |
10% |
10% |
|
194A |
Interest other than on securities by others |
Rs. 5000/- |
10% |
10% |
|
194B |
Winnings from Lotteries / Puzzle / Game |
Rs. 10000/- |
30% |
30% |
|
194BB |
Winnings from Horse Race |
Rs. 5000/- |
30% |
30% |
|
194 C(1) |
Payment to Contractors |
Rs. 30000/- for single payment, Rs. 75000/- for aggregate payment during Financial Year |
1% |
2% |
|
194 C(2) |
Payment to Sub-Contractors / for Advertisements |
|||
|
194 D |
Payment of Insurance Commission |
Rs. 20000/- |
10% |
10% |
|
194 EE |
Payment of NSS Deposits |
Rs. 2500/- |
20% |
NA |
|
194 F |
Repurchase of units by Mutual Funds / UTI |
Rs. 1000/- |
20% |
20% |
|
194 G |
Commission on Sale of Lottery tickets |
Rs. 1000/- |
10% |
10% |
|
194 H |
Commission or Brokerage |
Rs. 5000/- |
10% |
10% |
|
194 I |
Rent of Land, Building or Furniture |
Rs. 180000/- |
10% |
10% |
|
Rent of Plant & Machinery |
Rs. 180000/- |
2% |
2% |
|
|
194 IA |
Transfer of Immovable Property (w.e.f. 01.06.2013) |
Rs. 50 Lacs/- |
1% |
1% |
|
194 J |
Professional / technical services, royalty |
Rs. 30000/- |
10% |
10% |
|
194 J(1) |
Remuneration / commission to director of the company |
- |
10% |
10% |
|
194 J(BA) |
Any remuneration / fees / commission paid to a director of a company, other than those on which tax is deductible u/s 192. |
- |
10% |
10% |
|
194 L |
Compensation on acquisition of Capital Asset |
Rs. 100000/- |
10% |
10% |
|
194 LA |
Compensation on acquisition of certain immovable property |
Rs. 200000/- |
10% |
10% |
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