Is it mandatory to have a TAN (Tax Deduction and Collection Account Number) for deducting TDS?
Yes, it is mandatory to have a Tax Deduction and Collection Account Number (TAN) for deducting TDS (Tax Deducted at Source). TAN is a 10-digit alphanumeric number issued by the Income Tax Department in India. It is required to be quoted when deducting or collecting tax at source on various payments such as salary, interest, dividends, rent, etc.
When a person or entity is liable to deduct TDS, they need to apply for a TAN and use it in all communications and transactions related to TDS. Failure to obtain a TAN or quoting an incorrect TAN can lead to penalties and other consequences under the Income Tax Act.
Therefore, it is essential for entities liable to deduct TDS to obtain a TAN and comply with the TDS provisions as per the tax laws in their respective countries.