1. What is TAN? Is it compulsory to have for TDS deduction ?

Persons liable to apply for 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.

However, a person required to deduct tax under section 194-IA can use PAN in place of TAN as such person is not required to obtain TAN. Further, a person required to deduct tax under section 194-IB or section 194M shall not be required to obtain tax deduction account number (TAN).

2. Who is responsible for TDS deduction ?

TDS is deducted by the person making certain specified payments at certain rates and threshold limits as prescribed by the Income Tax Act.

The balance amount after the deduction is paid to the recipient and the amount deducted is paid to the Income Tax department.

The person responsible to deduct TDS is termed as “Deductor” and the person who receives the payment after tax deduction is termed as “Deductee”.

3. What is Form 16 ?

Form 16/16A is the TDS certificate which is issued on deduction of tax by the deductor on behalf of the deductees.

In simple terms, Form 16 is a certificate provided by the deductor which certifies details regarding the Income you have earned during the year and how much TDS has been deducted.

Form 16 has two parts:-

Part A has information of the employer & employee, like name & address, PAN and TAN details, the period of employment, details of TDS deducted & deposited with the government. Part B includes details of salary paid, other incomes, deductions allowed, tax payable etc.

4. What is Form 26AS ?

Form 26AS is an annual consolidated credit statement issued under Section 203AA of the Income-tax Act, 1961, in which the details of tax credit are maintained for each taxpayer as per the database of Income-tax that taxpayers can access, view or download.

Form 26AS not only contains the details of your taxes paid but also contains details of any tax refunds that have been received by you during the past years.

One should always verify 26AS prior to filing your Income tax return (ITR).

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