Understanding TAN in Income Tax How to Fill Out an Online Application

Understanding TAN in Income Tax How to Fill Out an Online Application

The Income-tax Department provides a 10-digit alpha-numeric number known as the tax deduction account number or tax collection account number. All individuals who are obligated to collect tax at source (TCS) or who are liable for deducting tax at source (TDS) must get TAN. 

The Income-tax Department provides a 10-digit alpha-numeric number known as the tax deduction account number or tax collection account number. All individuals who are obligated to collect tax at source (TCS) or who are liable for deducting tax at source (TDS) must get TAN. Applications for TAN can be submitted online or offline.

Your Tax Deduction and Collection Account Number, or TAN, is required to appear on a number of documents, including payments, certifications, information returns, TDS or TCS returns, and more. A TAN is required if you are participating in source deducting taxes or if your taxes are being withheld at the source.

 

What Is TAN?

The Income-tax Department issues a 10-digit alpha-numeric number known as the Tax Deduction Account Number or Tax Collection Account Number.

All individuals who are in charge of deducting taxes at source (TDS) or who must collect taxes at source (TCS) must obtain TAN.

Eligibility for TAN Application

You ought to have a TAN if you are paying someone else a commission or a wage. This covers local, state, and federal governments. It might be a company, a branch or division of a company, an individual or a Hindu Undivided Family, a sole proprietor, a partnership, organization of people, or trusts. It can also be a statutory or autonomous body.

TAN

Online Procedure for TAN Application

  • Visit https://tin.tin.nsdl.com/tan/index.html as your first step.
  • Next, opt for ‘online application for TAN (Form 49B)‘.
  • Select the deductor category from the provided drop-down menu.
  • Click the ‘select button‘.
  • Input the required details on the form, ensuring all mandatory fields are filled (especially those marked with a star).
  • If there are any format-level validation errors in the data submitted, you will receive a response indicating the error(s).
  • Correct the errors and resubmit the forms.

Read More: 8 Key Points Explaining Income Tax Benefits for Senior Citizens on Interest Income

  • If there are no form-level errors, a confirmation screen displaying the applicant’s filled data will appear.
  • If needed, choose the edit option to make changes to the displayed information.
  • Confirm the accuracy of the information on the confirmation screen and select the confirm option. Note: Upon successful payment of fees (excluding DD or cheque modes), an acknowledgment slip will be generated.
  • After concluding the application process, it is essential to save and print the acknowledgment. Subsequently, send the printed acknowledgment along with the necessary documents to NSDL.

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Strategies for Salaried Individuals to Save on Taxes in the Financial Year 2023-24

Taxes

Strategies for Salaried Individuals to Save on Taxes in the Financial Year 2023-24

The Income-tax Act of 1961 offers a number of deductions and exclusions that people can use to reduce their tax liability on income received in Fiscal Years 2023–2024.

Taxes

The Income-tax Act of 1961 offers a number of deductions and exclusions that people can use to reduce their tax liability on income received in Fiscal Years 2023–2024. However, the amount of tax that a person can save will vary depending on two things: The tax system they select and the costs or investments they incur in order to qualify for the aforementioned deductions. It is significant to note that the interim budget for 2024 does not alter the income tax slabs for the fiscal year 2024–2025 (April 1, 2024–March 31, 2025).

As of this fiscal year, the default tax regime is the new one. A salaried person must specifically choose the previous tax system. If a person chooses to continue paying taxes under the previous system, they will still be able to take advantage of tax exemptions like home rent allowance (HRA), leave travel concession (LTC), and deductions under sections 80C (up to Rs 1.5 lakh in a fiscal year), 80D (deduction for paid medical policy premiums), 80E (interest paid on student loans), etc. Remember that under the new tax law, there are only two deductions permitted.

Deductions and exemptions for eligible investments or expenses

Section 80C

Individuals may claim up to Rs 1.5 lakh in deductions under section 80C per financial year. Only taxpayers who choose to use the previous tax system are eligible to claim the 80C tax advantage.

The Public Provident Fund, Employees’ Provident Fund (EPF), Equity-Linked Savings Scheme (ELSS), Tax-saving Fixed Deposits (FD), National Savings Certificate (NSC), and many more investment options are eligible under Section 80C. Under section 80C, some expenses may also be deducted as long as they are truly incurred. Among them are things like life insurance premiums, kids’ education expenses, principal repayment on home loans, etc.

 

Section 80 CCD(1B)

Individuals may deduct up to Rs 50,000 for investments made in the National Pension System (NPS), which is an additional deduction above the Section 80C deduction.

The deduction allowed under section 80CCD(1B) of up to Rs 50,000 exceeds the Rs 1.5 lakh section 80C threshold limit. Therefore, under the previous tax system, a person may deduct up to Rs 2 lakh in taxes by adding both of these deductions.

 

Section 80 CCD (2)

A person may only claim a deduction under section 80 CCD (2) if their employer, whether public or private, makes contributions to their NPS account. An employee in the private sector may deduct no more than 10% of their compensation, which is calculated as base pay plus dearness allowance (DA). Under section 80 CCD, government employees may withhold up to 14% of their pay (2).

An additional requirement is that an employer’s contribution to an NPS, EPF, or superannuation fund may only be deducted up to Rs 7.5 lakh within a fiscal year. The excess payment, along with any interest or dividends made on it, will be taxable in the employee’s hands as perquisites if the employer’s total contribution exceeds Rs 7.5 Lakh in a given fiscal year.

There is a deduction for 80CCD (2) under both the old and new tax systems.

Taxes

Section 80D

Only those who have purchased health insurance policies for themselves, their spouses, their dependent children, or their parents are eligible for a deduction under section 80D. Moreover, it is only accessible under the previous tax structure.

Under section 80D, individuals under 60 years of age can deduct up to Rs 25,000 for health insurance premiums paid for themselves, their spouses, and their dependant children. Additionally, a further sum of Rs 25,000 can be claimed as a section 80D tax deduction if the individual is paying the health insurance premium for parents who are under 60 years old.

An individual may claim up to Rs 50,000 in additional tax deduction under section 80D if they are paying the health insurance premium for senior citizen parents (those 60 years of age or over), as opposed to the Rs 25,000 additional deduction. Additionally, a person may deduct Rs 5,000 from their taxes for whatever costs they make for preventative medical examinations. However, this sum (Rs 5,000) is only allowed up to the entire Rs 25,000/Rs 50,000 section 80D limit.

 

Deduction for professional tax

In some states, professional tax is mandatory for all individuals, regardless of their income type. “If professional tax is paid by the employer on behalf of its employee, then it is first included in the salary of the employee in their Form 16 as a perquisite and then the same amount is allowed as deduction without any limit.” “For salaried individuals, professional tax is deducted by their employer and deposited with the appropriate state government.”

Only under the previous tax regime is it possible to deduct professional tax payments: Section 16(iii) permits salaried individuals to do so, if they so want, in order to calculate their taxable compensation. However, those who choose to pay professional tax under Section 115BAC’s new, reduced tax regime are not eligible to claim the aforementioned deduction.

 

Leave Travel Allowance (LTA)

LTA is a reimbursement that the worker is eligible to receive for himself and his dependents, including his spouse, kids, parents, siblings, and sisters, who travel to any location in India while on leave. The guidelines for determining the amount that can be claimed as an LTA deduction are outlined in the Income-tax Act.

The employee’s domestic travel expenses (airfare, train or bus fare) are the only ones covered by the LTA exemption. LTA does not cover other costs such internal travel, lodging, meals, sightseeing, or transportation within the destination.

Only individuals who choose to use the previous tax system are eligible for the LTA tax exemption.

 

House Rent Allowance (HRA)

An individual may be eligible for tax exemption on HRA if they are under the old tax regime, are paying rent for their housing, and get an HRA component of their wage. Having said that, after a certain computation and up to Rs 60,000 in annual rent, a person who pays rent but does not receive HRA as part of their wage may also be eligible to claim tax exemption on HRA.

 

Deduction for Encashment of Leaves

10 (10AA) states that “government employees have no monetary limit for claiming deduction of leave encashment.” Leave encashment is defined as the encashment of unused earned leave at the time of retirement. However, there is a formula that non-government sector workers must adhere to in order to determine the precise amount of leave encashment that can be deducted.

This tax deduction on leave encashment is only available for those under the old tax regime.

Deduction for home loan interest 

Under section 24(b), a person may deduct interest paid on a home loan if they are living in the residence for which they have obtained a home loan. In a given financial year, the maximum amount that can be deducted for home loan interest is Rs 2 lakh. The interest component of the home loan is deductible under section 24(b), and a deduction of up to Rs 1.5 lakh for the principal component is possible under section 80C.

In restricted circumstances, individuals who choose to use both the old and new tax regimes may be eligible for this deduction.

Section 80E

An individual may deduct the interest portion of an educational loan under section 80E. The maximum amount of a deduction under section 80E is unlimited, and there is no requirement for an individual to provide any supporting documentation in order to make such a claim. There is an eight-year maximum for this deduction.

The 80E tax deduction is only available to those who choose to use the previous tax system.

The financing for his higher education or the higher education of his relative should have been obtained from any financial institution or from any philanthropic organization that has been recognized.

Read More: 3 Key Income Tax Modifications Introduced in the Interim Budget of 2024

Section 80 EEB

An individual is eligible to deduct interest on an electric car loan up to Rs 1.5 lakh each financial year. But the loan needs to be approved sometime between April 1, 2019, and March 31, 2023.

Standard deduction

Both the previous and new income tax regimes allow salaried individuals to deduct a standard amount of Rs 50,000.

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3 Key Income Tax Modifications Introduced in the Interim Budget of 2024.

Interim Budget

3 Key Income Tax Modifications Introduced in the Interim Budget of 2024

Additionally, it was stated in the budget speech that there are no planned rate adjustments for direct taxes.

The interim budget has implemented the following adjustments on income tax.

Interim Budget

Partial Withdrawal of Outstanding Direct Tax Demands: Limits for FY 2009-10 and FY 2010-11 to 2014-15

Due to the online ITR processing, CPC Banglore has been posting previous demands on taxpayers’ Income Tax Portals. It was discovered that these demands were incorrect on several occasions. The government failed to speed the process to withdraw the demand, which led to the taxpayers site displaying tax and interest on these demands. If the taxpayer was entitled to a refund, these requests prevented the refund from being processed, and in certain situations, the refund was changed to reflect these demands. The government’s decision to remove these requests is a positive one. According to the budget address, around one crore tax payers should profit from this.

Extension of Tax Incentives originally expiring on 31-3-2024 to 31-3-2025

a) Section 80IAC allowed eligible start-ups incorporated between April 1, 2016, and March 31, 2024, to claim a 100% deduction on profits and gains from their business for three consecutive assessment years.

b) Section 10(4D) pertained to specified income, derived from the transfer of capital assets, by specified Alternative Investment Funds (AIFs) located in any International Financial Services Centre (IFSC) or the investment division of offshore banking units. This provision applied if the fund commenced operations on or before March 31, 2024.

Interim Budget

c) Section 10(4F) provided an exemption for non-resident income, such as royalty or interest from leasing aircraft or ships, paid by a unit of an IFSC. This exemption applied if the IFSC commenced its operations on or before March 31, 2024.

d) Section 10(23FE) granted an exemption for the income of a specified person in the form of dividends, interest, or specified sums received by a unit holder from a business trust. This exemption applied to long-term capital gains arising from investments made in India, whether in the form of debt, share capital, or units. The investment must be made on or after April 1, 2020, but on or before March 31, 2024, subject to certain conditions.

e) Section 80LA provided a deduction under section 80LA(1A) for any income generated by an International Financial Services Centre (IFSC) unit through the leasing activities of aircraft or ships. This deduction was applicable if the IFSC commenced its operations on or before March 31, 2024.

f) Sections 92CA, 144C, 253, and 255 empowered the government to issue directions until March 31, 2024.

Note: It’s crucial to highlight that there is no extension of the time limit specified in Section 115BAB and Section 115BAE. Section 115BAB offers a concessional tax rate (15%) for income earned by new manufacturing domestic companies, and Section 115BAE provides a similar concessional tax rate (15%) for new manufacturing co-operative societies. Both provisions apply if manufacturing commences by March 31, 2024.

Read More: Major Highlights of the Interim Budget 2024

Amendments to Section 206C

The Finance Act of 2023 implemented a retrospective increase in the Tax Collected at Source (TCS) rate for the Liberalised Remittance Scheme (LRS) and overseas tour packages. The rate was elevated from 5% to 20%, with effect from July 1, 2023, and officially enforced from October 1, 2023.

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