TAN Registration: The Tax deduction number is a 10-digit alpha numeric number that is allotted to all the persons/employers who are responsible for deducting tax at source on behalf of the income tax department. The TAN number is allotted by the income tax authorities to the applicant. It is mandatory for every tax deductor to quote the tax deduction number in all TDS returns and all other communication with the tax authorities and failure to do so will attract a penalty of Rs. 10,000.
Who can apply?
The following legal bodies collecting TDS are responsible to obtain TAN Number:
- Central/state government or local authority
- Statuary/ Autonomous body
- Company
- Branch/ Division of company
- Individual/ Hindu Undivided family
- Branches of the individual business
- Firms/ Associations of persons
Structure of TAN Number:
TAN number is a 10digit number. First 3 alphabets represent the jurisdiction code, the 4th alphabet is the initial of the name of the TAN holder who can be a company/ firm, individual, etc further five numbers and last digit makes the TAN number of every person unique.
Documents required for obtaining TAN number:
- Applicant proof of identity
- Form 49 B for filing acknowledgement
How to apply for TAN?
An application for TAN can be filed through online mode and offline mode.
Offline:
Form 49B shall be submitted to any TIN -FC to file an application for allotment of TAN. Addresses for TIN – FCs are available at NSDL – TIN website. In case an applicant, being a company, which has not been registered under the Companies Act 2013, the application for allotment of Tax Deduction Account Number may be made in Form No INC -7.
Online:
- Visit the official TIN website
- Select ‘TAN’ option from the services tab on the homepage
- Click on ‘apply online’ option and select ‘New TAN’
- On the redirected page, choose the respective category of deductor
- Now, the website redirects you to fill Form 49B
- Fill in the form and click on ‘Submit’ option
- Pay the required fee of Rs. 65 (Rs. 55 application fees+18% GST). Applicants will be charged and additional 2% when completing the transaction with credit card or debit card. Individuals making payment through net banking will be charged an additional Rs. 4 on top of GST.
- The screen will display a 14-digit acknowledgement number and other details.
- Save this page and take printout of it.
This printout and required documents should be sent to the following address: NSDL e-governance Infrastructure Limited 5th Floor, Mantri sterling Plot No. 341, Survey No. 997/998, Model Colony near Deep Bungalow Chowk, Pune – 411016.
You will receive the TAN card within 7 – 15 days.
TDS is income tax reduced from the money paid at the time of making specified payments such as rent, commission, professional fees, salary, interest, etc. The government with the help of Tax Deducted at Source provisions makes sure that income tax is deducted in advance from the payments being made. The recipient of income receives the net amount (after deducting TDS). The recipient will add the gross amount to the income and amount of TDS is adjusted against the final tax liability. The recipient takes credit for the amount deducted and paid on his behalf.
- Any person making payments mentioned under the Income Tax Act is required to deduct TDS at the time of making such payment. But no TDS has to be deducted if the person making the payment is an individual or HUF whose books are not required to be audited.
- For most payments rates of TDS are set in income tax act and TDS is deducted by the payer on the basis of these specified rates.
- The tax deducted at source must be deposited to the government by the 7th of the subsequent month
- TDS has to be deposited using challan -281 on the government portal.
- Filing of TDS returns is mandatory for all the persons who have deducted TDS. Different forms are prescribed for filing returns depending upon the purpose of the deduction of TDS.
| Form No | Transaction reported in the return | Due Date |
| Form 24Q | TDS on Salary | Q1- 31st July
Q2 – 31st October Q3 – 31st January Q4 – 31st May |
| Form 26Q | All payments except salaries | Q1- 31st July
Q2 – 31st October Q3 – 31st January Q4 – 31st May |
| Form 27Q | TDS on all payments made to non-residents except salaries | Q1- 31st July
Q2 – 31st October Q3 – 31st January Q4 – 31st May |
| Form 26QB | TDS on sale of property | 30 days from the end of the month in which TDS is deducted |
| Form 26QC | TDS on Rent | 30 days from the end of the month in which TDS is deducted |
- TDS certificates have to be issued by a person deducting TDS to the assessee from whose income TDS was deducted while making payment.
| Form | Certificate of | Frequency | Due date |
| Form 16 | TDS on salary payment | Yearly | 31st May |
| Form 16A | TDS on non-salary payment | Quarterly | 15days from due date of filing return |
| Form 16B | TDS on sale of property | Every Transaction | 15days from due date of filing return |
| Form 16C | TDS on Rent | Every Transaction | 15days from due date of filing return |
- If TDS has been deducted from any income one must go through the Tax Credit From 26AS.
Income Tax
Private Limited Company:
All companies registered in India are required to file income tax returns each year on or before 30th September. Company Tax return filing falls under two categories, namely domestic or foreign companies.
- Companies registered and operating a business in India for profit must file ITR 6.
- ITR returns are not capable of accepting document attachments. No need for filing any documents with the tax return, but all the supporting documents must be stored by the taxpayer and should be produced before the tax authorities when demanded.
- Class 2 digital signature and PAN card of company is required to file ITR 6.
- The Companies Act, 2013 makes it compulsory for all companies to maintain a book of accounts in the particularized format. Accounting software like Tally helps maintain books of accounts for business.
- The following are the income tax rates that are applicable for companies registered on India:
- Domestic companies are to be taxed at 30%
- If income is greater than Rs. 1,00,00,000 – surcharge of 7% of the income tax amount is applicable. If income is greater than Rs.10,00,00,000 – surcharge of 12% of the income tax amount is applicable.
- Health and Education Cess @ 4% on the amount of income tax + surcharge being paid is applicable.
- If the income received by the foreign company is in the form of fees for technical services and royalties paid by the Indian Government in relation to agreements made with an Indian concern will be taxed at 50%
- Any Other Income, are to be taxed at 40%
- If income is greater than Rs. 1,00,00,000 – surcharge of 2% of the income tax amount is applicable. If income is greater than Rs.10,00,00,000 – surcharge of 5% of the income tax amount.
- Health and Education Cess @ 4% on the amount of income tax + surcharge being paid is applicable.
- MAT on Private Limited Company is 15%. MAT is considered payable only if tax applicable as per normal provisions of the Act is lesser than 18.5% of book profits.
Companies have only one option available and accordingly file return of income electronically through digital signature.
The due date for filing of return by Private Company is:
- For the companies that does not require Audit, the due date for ITR filing is 31st
- The due date for ITR filing for the companies that require audit is 31st
- The due date for the Tax Audit Report filing is 30th September
- For companies that are involved in transfer pricing the due date for filing Income Tax return is 30th November
Limited Liability Partnership or Partnership Firm:
A firm is taxed as a separate legal entity. In computing the taxable income of a firm any salary, bonus, commission or remuneration which is due to or received by a partner is allowed as deduction subject to certain restrictions. Where a firm pays interest to a partner, the firm can claim deduction of such interest from its total income. However, the maximum rate at which interest is allowed to a partner is 12% pa. Remuneration and capital are calculated as per the provisions of section 40(b) of the Income Tax Act, 1961.
LLP and Partnership Firms are taxed at a flat rate of 30% + surcharge+ cess. Partners have to pay income tax as per the income tax slab rate applicable for individual.
Surcharge @ 12% is applicable if the income is more than Rs. 1crore and no surcharge if the income is less than 1 crore. Health and Education Cess is computed @ 4% on income tax and surcharge. MAT applicable @ 15%.
The due date for filing income tax return that does not require audit is 31st July.
In case the income tax return whose accounts needs to be audited, the due date for filing return would be 30th September.
Working Partners are required to file their return whose audit is required u/s 44AB by 31st October
Partnership firms are required to file ITR 4 and LLPs are required to file ITR 5.
It is necessary for all the partnership firms to file income tax, either manually or electronically. Income Tax for a firm can be verified with or without a digital signature, or an electronic verification code (EVC). When a partnership firm is required to get an audit, it is compelled to do an e-filing of its income tax returns (ITR). For the filing of ITR, all the partners are required to have a Class 3 digital signature certificate (DSC) for verification of the filing process.
If the firm decides to file income tax returns manually, the assessee is required to print out two copies of Form ITR-V. One copy of the ITR-V has to be signed by the assessee and has to be posted to the centralised processing centre (CPC), Income Tax Department, Bengaluru, Karnataka 560500. The second copy of the ITR-V form has to be retained by the assessee for their record.
Proprietor:
A sole Proprietorship is owned by single owner, and is not legally recognised as a separate legal entity and is therefore an informal structure. It is taxed according to the relevant income tax slab rates of the individual.
Proprietorship Tax Rate for AY 2023-2024, FY 2022-2023
Proprietor Age < 60 years
| Taxable Income | Tax Rate |
| Up to Rs.2,50,000 | Nil |
| Rs.2,50,000 to Rs.5,00,000 | 5% |
| Rs.5,00,000 to Rs.10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
Proprietor Age between 60 and 80 years
| Taxable Income | Tax Rate |
| Up to Rs.3,00,000 | Nil |
| Rs.3,00,000 to Rs.5,00,000 | 5% |
| Rs. 5,00,000 to Rs. 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
Proprietor Age >80 years
| Taxable Income | Tax Rate |
| Up to Rs.5,00,000 | Nil |
| Rs.5,00,000 to Rs.10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
Resident individuals whose income does not exceed (Rs. 5,00,000 for FY 22-23) can avail rebate u/s 87A. This rebate is deductible from income tax before calculating education cess. The amount of rebate is 100% of income or Rs.12,500 whichever is less.
In addition to Income Tax amount calculated, based on above slab rates, individuals are required to pay surcharge and cess:
- Surcharge @ 10% of income tax, where total income exceeds Rs.50 lacs up to Rs. 1 crore.
- Surcharge @ 15% of income tax, where total income exceeds Rs. 1 crore.
- Health and Education Cess @ 4% income tax + surcharge.
The due date for filing income tax return for proprietorship that does not require audit is 31st July.
In case the income tax return of a proprietorship needs to be audited, the due date for filing return would be 30th September.
Form ITR 3 needs to be filed by a proprietor who is carrying out proprietary business or profession.
The income Tax return of a proprietorship firm can be filed either online using digital signature of the proprietor or manually. If filed manually, then the proprietor should print out two copies of the Form ITR-V. One copy of ITR-V, duly signed by the proprietor, has to be sent by ordinary post to bag No.1, Electronic city office, Bengaluru- 560100 (Karnataka). Other copy may be retained by the proprietor for his/her records.
Advance Tax:
Advance Tax is the amount of income tax that should be paid much in advance instead of lump sum payment at the year-end in instalments as per the due dates given by Income Tax department. Advance Tax is also known as ‘pay as you earn’ tax and is supposed to be paid in the same year the income is received.
A taxpayer is required to pay advance tax if their tax liability is Rs.10,000 or more in a financial year. It is applicable for self employed individuals, professionals, and business men if their income exceeds a certain limit. This includes money that comes from shares, interest earned on fixed deposits, rent or income received from house tenants. Senior citizens who are more than 60 years of age are exempt to advance tax.
Listed below are the steps to calculate advance tax:
- Make an estimate of the total income earned other than salary.
- Subtract all expenses from income, including medical insurance premium, phone costs, travel, etc.
- Add other income apart from salary. This includes interest from FDs, house rent, lottery earnings, etc.
- If the amount of tax calculated is more than Rs.10,000, then Advance Tax is applicable.
Benefits of Advance Tax:
- It reduces the burden of paying tax at the last moment
- It helps in mitigating stress that a taxpayer may undergo while making tax payment at the end of fiscal year.
- It helps in raising government funds as the government receives interest on tax collected.
- It helps people from failing to make their tax payments.
Due dates for payment of Advance Tax:
| Due Dates | Advance Tax Payable |
| On or before 15th June | 15% of advance tax liability |
| On or before 15th September | 45% of advance tax liability |
| On or before 15th December | 75% of advance tax liability |
| On or before 15th March | 100% of advance tax liability |
If the taxpayer has deposited less than 90% of the total tax liability, interest will be levied u/s 234B. The taxpayer has to pay interest @ 1% per month. If the taxpayer pays a higher advance tax, the taxpayer will receive interest @ 6% p.a. on the excess amount if the excess amount is more than 10% of the tax liability.
Failing to pay Advance Tax by due dates results in penalty. If the taxpayer doesn’t make full payment, interest is levied on the shortfall amount. And in case of shortfall for payment, interest will be levied for a period of 3 months u/s 234C
GST
Goods and Service Tax is a consolidated indirect tax policy that encompasses VAT, CST and Service Tax, Central Excise duty, etc. and is valid all over India w.e.f 1st July, 2017.
Businesses are mandatory to register under GST when annual t/o exceeds 40/20 lakhs or supply goods and services interstate or through E-commerce platform.
GSTIN is the abbreviation for Goods and Service Tax Identification Number. It consists 15 alphanumeric digits. This is generated by the government after GST registration being successful. First 2 digit is the state code. Next 10 digit indicates PAN number. Next 1 shows serial number of GST registration in a state. Last 2 digits are random.
GST Composition Scheme:
GST Composition Scheme is for small taxpayers, which is framed to reduce the tax compliance burden. Small taxpayers need not file monthly GST returns and they need to pay nominal GST at a fixed rate of Turnover. Any business having an annual turnover up to Rs. 1.5 crore can opt for GST registration under composition scheme.
GST Registration Process:
In the event of operation from more than one state, registration is required for each state where the business is under operation.
- Go to GST portal www.gst.gov.in
- Tap on the Register Now link in the taxpayer’s tab
- Click “New Registration”
- Fill in the details below
- Click on taxpayer
- Select the suitable state and country
- Enter your company name
- Enter the PAN of the company
- Enter the email address and mobile phone number in the appropriate field, the entered email address and mobile phone number must be active as the OTP will be sent to them
- Enter the photo shown on the screen and tap on “Continue”
- Enter the OTP sent to the email address or mobile number in the applicable fields on the next page.
- After entering the appropriate data click on “Continue”.
- Now, note the temporary reference number (TRN) that has been displayed on your screens for further use.
- After noting the TRN, revisit the GST registration portal and click on Register under taxpayer menu.
- Tap on “Temporary Reference Number (TRN)”
- Enter the TRN details and password that was noted by you.
- Tap to Continue
- OTP will be sent to the email address and mobile number. Enter OTP and select next followed by continue.
- Status of the application will be displayed on the next page. There will be an “edit” icon on the right, click it.
- There will be 10 sections on the next page. All required data must be filled in.
- Visit the confirm page to verify, then submit the request using one of the methods mentioned below:
- Via an Electronic Verification Code. An OTP will be sent to the submitted phone number
- By electronic signature method. An OTP will be sent to the mobile number associated with Aadhar Card.
- In case of applying companies, the application must be submitted with a Digital Signature Certificate (DSC)
- The application reference number will be sent to the registered mobile phone number and email ID. After registration, a success message will be shown on the screen.
- Check the ARN status on the GST portal.
Documents required for GST Registration
- Permanent Account Number (PAN)
- Copy of Aadhar Card
- Business Registration Confirmation or Registration Certificate
- Identification and address proof of promoters with a photograph
- Bank Account Statement/ cancelled cheque
- Authorisation letter/ board resolution for authorised signatory
- Digital Signature
GST Returns:
A GST return refers to the tax document or form that contains information about income/sales along with purchases/ expenses that GST registered taxpayers need to file with the authorities. This return is then used by authorities to calculate their net tax liability. The various of GST Returns are as below:
| GST Return Form | Description | GST Return filing Frequency | Due Dates |
| GSTR 1 | Covers details of the outward supplies of taxable goods/ services | · Monthly
· Quarterly |
11 of next month (monthly)/ 13th of the month after every quarter |
| GSTR 2A (view only) | Covers details of purchases made in a specific month | NA | |
| GSTR 2B (view only) | Contains ITC data for a particular return period | NA | |
| GSTR 3B | Contains a summary of outward supplies and ITC claimed, along with tax paid | · Monthly
· Quarterly
|
20th of the next month/ 22nd or 24th of the next month succeeding the quarter |
| CMP 08 | Refers to the statement -cum-challan used for making a tax payment by taxpayers registered under the composition scheme | Quarterly | |
| GSTR 4 | Refers to the annual return to be filed by taxable individuals under the composition scheme | Annual | 30th of the next month succeeding a financial year |
| GSTR 5 | GST returns to be filed by a non -resident foreign taxable person | Monthly | 20th of the next month |
| GSTR 5A | Summary of outward taxable supplies and tax payable by OIDAR service providers | Monthly | 20th of the next month |
| GSTR 6 | Return to be filed by an Input Service Distributor (ISD) to distribute eligible ITC to its branches | Monthly | 13th of the next month |
| GSTR 7 | GST returns to be filed by registered individuals deducting TDS | Monthly | 10th of the next month |
| GSTR 8 | GST returns to be filed by the e-commerce operators registered under the GST regime | Monthly | 10th of the next month |
| GSTR 9 | Annual return to be filed by regular taxpayer | Annually | Dec 31 of the next financial year |
| GSTR 9C | Self-Certified Statement filed by all taxpayers registered under the GST regime and having a turnover of more than Rs. 2 crores in a year | Annually | Dec 31 of the next financial year |
| GSTR 10 | Return to be filed by a taxpayer whose GST registration was either cancelled or surrendered | Once, at the time of cancellation or surrender of GST registration | Within 3 months of the date of cancellation |
| GSTR 11 | Details of inward supplies to be furnished by an individual having a UIN to claim a refund | Monthly | 28th of the month following the month for which a taxpayer files the statement. |
Who Should file GST Return?
Under GST regime, businesses having an annual aggregate turnover of Rs. 5 crores or more and individuals who have not chosen the QRMP (Quarterly Return filing and Monthly payment of Taxes) scheme need to file 25 returns in a year. This includes two monthly return and an annual return.
Taxpayers with a turnover of less than Rs. 5 crores get the option to file GST returns under QRMP scheme. The number of GST return filings under this scheme in nine every year. The taxpayers enrolled under this scheme must pay the taxes every month though they file GST returns quarterly.
Penalty for late filing of GST Returns
If a taxpayer fails to get the GST return filing done within the specified time limit, he/she will be liable to pay a late fee along with an interest. The interest is charged @ 18% pa on the outstanding tax amount. Along with this, late fees of Rs. 100 each for CGST and SGST is applicable.