Income tax: Can one enter a taxable transaction with a non-resident without a TAN?

We are purchasing a property from an NRI, and the registration is scheduled for next week. As per the requirements, we need to deduct and deposit the TDS for this transaction, for which one needs to have a TAN (Tax Deduction Account Number). We do not have a TAN. Is there any provision to deposit TDS without a TAN, especially for transactions involving NRIs?Obtaining a TAN is mandatory. Are there any expedited procedures to secure one before the transaction date?What are the potential penalties or implications if there is a delay in the deposit of the TDS in the absence of a TAN?

When a person pays any amount to a non-resident that is taxable as income in India, he has to deduct tax at source before making the payment to the non-resident at the rates in force. The amount of tax deducted has to be deposited by the 7th of the next month in which the tax is so deducted.

Please note that tax deducted from the source cannot be paid unless you have a valid and active TAN. Please note that you don’t need to make payment of the TDS simultaneously while making payment to the non-resident, and the same can be deposited by 7 th the next month in which you remit the money to the non-resident.

Implications of TDS delays without TAN in NRI property transactions explained

There is no special provision for Tatkal, such as the allotment of TAN under the tax laws. You can enter into the transaction even if you do not have the TAN in your hand. You can either apply online through the following link or submit a physical TAN Application to any Protean TIN-Facilitation Center (TIN-FC).

You have to pay interest for delay in payment of TDS beyond the due date. A penalty may not be levied as you would have a valid and genuine reason for not depositing TDS in the absence of a TAN within the prescribed period.

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Balwant Jain is a tax and investment expert and can be reached on [email protected] and @jainbalwant on his X handle.

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