Tax Residency Certificates
In India, different types of registrations under the Income Tax Act are required depending on the nature of the entity and the specific requirements of the business. Here are the primary types of registrations:
1. Permanent Account Number (PAN)
A PAN is a ten-digit alphanumeric number issued by the Income Tax Department. It is mandatory for all taxpayers.
Who Needs It:
- Individuals
- Hindu Undivided Families (HUFs)
- Companies
- Firms
- Trusts
- Associations of Persons (AOPs)
- Body of Individuals (BOIs)
- Local Authorities
Purpose:
- To track all financial transactions of taxpayers.
- To prevent tax evasion.
2. Tax Deduction and Collection Account Number (TAN)
TAN is a ten-digit alphanumeric number required by entities responsible for deducting or collecting tax at source.
Who Needs It:
- Employers who deduct TDS from salaries.
- Entities deducting TDS on payments like rent, interest, dividends, etc.
- Entities collecting tax at source (TCS).
Purpose:
- To manage TDS/TCS deductions and payments.
- To file TDS/TCS returns.
3 Tax Residency Certificate: A resident taxpayer can file an application in Form 10FA to the Assessing Officer (‘AO’) for obtaining a TRC in India. The application form along with supporting documents has to be submitted to the AO. The New Rule provide that the AO, on receipt of the application and on being satisfied of the particulars contained therein, should issue the TRC to the resident assessee in Form 10FB.
- Lower Tax (TDS) Certificate: As per the provisions of the Income Tax Act, TDS/ TCS is required to be deducted at the prescribed rate at the time of making the payment. In case, the estimated tax liability of a person is lower than the TDS amount, then he has an option of applying to the department for a certificate directing TDS deductor to deduct tax at a lower/nil rate than the prescribed rate.
- Gratuity trust: According to section 36(1)(v) read with section 40A(7) of Income-tax Act, 1961, any sum paid by the employer by way of contribution towards gratuity fund is allowable as expenditure if the gratuity fund is approved by the tax authorities. In practice, the employer files an application with tax authorities to obtain approval for the gratuity trust.
We at Pays & Company., have the experience of obtaining various registrations and approvals from the tax department. In case you need our services, kindly contact us at info or call 8860757454.
