How do you surrender your TAN? Step-by-Step Guide to Surrender Your TAN

Introduction

Every individual and business owner responsible for tax deduction at source (TDS) is well-versed in the TAN (Tax Deduction and Collection Account Number) concept. A TAN is a 10-digit alphanumeric number issued by the Income Tax Department. 

It is used by persons collecting or deducting tax. Section 203A of the Income Tax Act, 1961, has mandatory quoting on TDS and TCS returns. Obtaining a TAN is necessary for those required to deduct tax. However, there are situations when you’ll have to surrender TAN. 

These situations can arise due to the closure or restructuring of the business. If you want to know if you fit in these situations or want to surrender your TAN, this blog is for you! Read below to find out more.

TAN and its Importance in Tax Compliance

A TAN is a unique ten-digit alphanumeric code allocated to entities collecting and deducting Income tax. TAN holders are responsible for deducting and collecting tax and presenting the accounts through timely returns.

TAN is mandatory to fill out all TDS returns, payments, and all other income tax correspondence. This ensures proper crediting of tax deducted at source to relevant accounts.

What are the Reasons for Surrendering your TAN?

There are several scenarios in which you may have to surrender your TAN. Some of them are:

• Closure of Business: Any business that has ceased its operations permanently may surrender its TAN. There’s no need for such companies to maintain an active TAN. Choose a professional who can help you submit your documents along with the winding up of the company.

• Change in Business Structure: A significant change in the business structure may require the assessee to surrender their old TAN. The assessee must apply for a new TAN immediately after the surrender. Change of partnership firm to LLP or dissolution of the firm to form new partnerships are a few examples of change in the business structure. You can consult your tax consultant, liquidator, or other professional to understand your situation.

• Merger or Acquisition: If a company has merged with another company or has been acquired by another company, the acquired company may be forced to surrender its TAN number.

• Receiving a Duplicate TAN: Businesses may sometimes end up with multiple TANs. They can choose to surrender their TANs in these cases and reduce compliance. They can decide which one TAN they want to keep.

Step by Step guide to Surrender a TAN

Surrendering a TAN generally includes a few systematic steps to ensure the process is handled correctly and legally. Here’s a step-by-step guide to help you through it:

Collecting All the Necessary Required Documents

1. Start by getting a copy of your TAN allotment letter. This is a crucial document required for the surrender of your TAN. Next, draft a letter to the Income Tax Department stating the season for surrendering your TAN.
2. Attach copies of the documents that support your claim.
3. Drafting the Surrender Request

You need to write or type a surrender request letter on your official letterhead. This should be done to notify all relevant authorities of your transfer. It is essential to mention all your TAN details. Provide reasons for the release of TAN. Finally, add your contact information for possible follow-up messages.

4. Submission to the Assessing Officer

Submit the transfer letter and supporting documents to your jurisdiction’s TAN reviewer. Make sure you get a receipt for your records.

5. Taking a Follow-Up

After submitting the documents, you must contact the appraiser to ensure that your request is processed. It may take a few weeks to complete the withdrawal process. At the end of the process, you may receive a confirmation letter from the Income Tax Department.

Things to consider

• No outstanding fees: Make sure that you keep any exceptional TDS up to the date of surrender. Pay all your expenses, and file all your returns. Pay all the pending payments to avoid complications.

• Document everything properly: Document everything properly. Only complete or correct documents can ensure the process is completed on time.

• Keeping all the records: Keep all the copies of correspondence, communication and receipts for your future reference. Keep copies of release letters, acceptance of receipt and any further communications.

Conclusion

Surrendering a TAN may seem like a daunting task at first. However, you can surrender your TAN quickly by following the given steps. Dealing with TAN surrender can streamline your business and reduce financial costs.

If any of the above steps overwhelm you, you can opt to choose a professional who can provide additional criteria and assistance to you. Focus on what you do the best! Let Lawgical Adda handle the rest. Choose our services for easy winding-up, restructuring and surrendering of documents. Contact us today!

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