PERMANENT ACCOUNT NUMBER (PAN)
Permanent Account Number is an identification number issued by the department of Income Tax. It is quoted for many financial as well as other transactions and ensures that a person does not escape his tax liability. Quote of this Permanent Account Number (PAN) has been made mandatory even to open a bank account and is required for every business registration in India.
It is a 10 digit alphanumeric number which is printed on a laminated card, known as PAN card along with other details like PAN number, Name of applicant, Father's name, Date of birth and passport size photo.It also includes Signature of the Applicant. Through this number income tax department can get every information about the assessed.
Under section 139A of Income Tax Act, 1961, PAN is required for the following persons:
• Whose total annual income is more than the amount which is not chargeable under income tax act.
• Whose income through business or other profession is more than Rs. 5 lakhs
• Who is filing income tax return.
PAN is necessary in case of the following:-
• Filing income tax return.
• Any correspondence with income tax department.
• Submitting Challans for payment of any tax to the department.
• At the time of verifications of identity of assessed in income tax department.
• To obtain Director Identification Number (DIN) and incorporate a Limited Company and register a LLP.
Documents required for Permanent Account Number (PAN):
• Passport size photo for individuals
• Address and ID proof for Individuals.
• Certificate of Incorporation for Companies / LLPs
TAX COLLECTION & DEDUCTION ACCOUNT NUMBER (TAN)
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. TAN is used for deducting taxes. If you are paying a salary, or making payments for a variety of purposes like consultancy fees, rent, contractual payments etc. the tax should be deducted at the source and paid to the Income Tax Department.
Who is required to obtain TAN? Under the Income Tax Act,1961, every person making payment or crediting income of specified types to another person is required to deduct a specific proportion of amount payable/creditable at the time of making payment or giving credit, whichever is earlier and deposit the sum so deducted i.e. TDS. Prior to making any such deduction, every such person shall have to apply to the Assessing Officer for allotment of a tax deduction account number (TAN) under section 203A of the Income Tax Act.
Any organization deducting tax at source is required to quote the TAN in the following documents:
• All Challans while depositing the tax so deducted.
• All certificates issued against the tax deducted.
• All returns furnished in respect of tax deducted at source.
• All other documents pertaining to such transaction as may be prescribed.
How to obtain TAN? An application for allotment of TAN should be filed in Form 49B. Online filing of TAN application can also be done and the application has to be submitted at any of the TIN Facilitation Centres meant for receipt of e-TDS returns along with applicable fees.
Documents Required for TAN No major 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. Generally a copy of PAN Card of the applicant and a copy of incorporation certificate (in case of a company) is submitted with the form.