TAN & TDS Mandatory for proprietorship business
This query is : Resolved
08 October 2025
Hello Sir/Madam,
I have a newly registered proprietorship Export business (Merchant Exporter). My estimated annual turnover is below 1 Cr. for FY2025-26.
I have some invoices of freight forwarder, Shipping lines and professionals to pay. I want to know whether I need to take a TAN number and deduct the TDS, is it mandatory for me or an option only.
Please guide me accordingly.
Thanks
I have a newly registered proprietorship Export business (Merchant Exporter). My estimated annual turnover is below 1 Cr. for FY2025-26.
I have some invoices of freight forwarder, Shipping lines and professionals to pay. I want to know whether I need to take a TAN number and deduct the TDS, is it mandatory for me or an option only.
Please guide me accordingly.
Thanks
08 October 2025
If an Individual or HUF’s total sales, gross receipts, or turnover in the preceding financial year is less than ₹1 crore (business) or ₹50 lakh (profession), they are generally exempt from the obligation to deduct TDS on payments under sections 194C (contractors), 194J (professional services), and similar sections—unless covered by special sections.
The obligation to deduct TDS is based on specific limits specified in the section, not dependent solely on overall business turnover. Even if annual turnover is below ₹1 crore, TDS and thus TAN may be necessary if individual payments cross specified limits.
So, TAN is mandatory when conducting transactions where TDS provisions are applicable, otherwise for new proprietorship firm it is not mandatory.
The obligation to deduct TDS is based on specific limits specified in the section, not dependent solely on overall business turnover. Even if annual turnover is below ₹1 crore, TDS and thus TAN may be necessary if individual payments cross specified limits.
So, TAN is mandatory when conducting transactions where TDS provisions are applicable, otherwise for new proprietorship firm it is not mandatory.
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