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- The Tax Deduction and Collection Account Number (TAN) is a mandatory 10 digit alphanumeric identifier issued by the Income Tax Department of India under Section 203A of the Income Tax Act. All individuals and entities that deduct / collect tax at source (TDS / TCS) are required to obtain a TAN.
- To file TDS returns, make TDS payments, issue TDS certificates (like Form 16), you will need to obtain a TAN registration number. Failing to correctly quote the TAN number in prescribed documents can lead to penalties of up to ₹10,000.
- If you are still wondering how to get TAN number, you can apply for it online through the NSDL or UTIITSL websites, using Form 49B.
- To verify or find your TAN registration number, use the TAN Status Tracker, or by logging into the Income Tax e-Filing portal with your PAN credentials.
Introduction
In 2023, a startup founder based in Bengaluru accidentally delayed applying for their TAN number. When it was time to file their first quarterly TDS return, they tried to submit the bank challan (but the bank rejected it because there was no TAN). The result? A late filing penalty and another problem to manage in a stressful assessment year. This isn’t a unique case. Countless Indian startups, NGOs and small businesses overlook the criticality of TAN when launching their business only to realize the financial and legal consequences later. If they had known about the requirement for TAN registration Number earlier, they could have saved valuable time and resources.
This is a common story amongst most Indian entrepreneurs and SME’s. TAN registration Number is more than a requirement, it is a necessary step towards financial accountability and legal compliance.
In this blog we talk about TAN Registration Number, how to get TAN Number and why it is crucial for any individual or business responsible for tax deductions or collections in India.
What is TAN Number?
TAN (Tax Deduction and Collection Account Number) is a 10-digit alphanumeric number issued by the Income Tax Department, Government of India. It is mandatory for all individuals and entities who are deducting or collecting tax at source under section 203A of the Income Tax Act, 1961. This number is crucial as you must quote it in the TDS/TCS returns, challans, and certificates (i.e., Form 16) sent to the Income Tax Department.
If you think of a PAN number, it is the same concept, but a PAN number is for an individual taxpayer, while a TAN is for a taxpayer that is responsible for TDS/TCS. If a business or employer pays salary, commission, and/or contractor payments that have TDS deducted, they must quote a TAN. If they do not quote a TAN, the TDS returns will be rejected, and they may incur penalties.
“Without TAN, your TDS returns are as good as rejected.”
What is the Structure of TAN?
A TAN looks like DELX12345B, and here’s how it breaks down:
- First 3 letters: These represent the jurisdiction code (e.g., DEL for Delhi), helping identify the geographic location of the deductor.
- 4th character: The first character of the deductor’s name or company name. It personalizes the TAN and helps link it back to the entity.
- Next 5 digits: These are system-generated unique numbers, ensuring that each TAN is distinct.
- Last character: An alphabetical check digit, automatically assigned for error detection and system tracking.
This systematic structure ensures the uniqueness and traceability of every TAN issued in India.
Who Provides TAN?
TAN is issued by the Income Tax Department, Government of India. However, the operational tasks are outsourced to Protean eGov Technologies Limited (formerly NSDL), which runs the Tax Information Network (TIN) portal. The TAN application can be filed either online or offline, making it accessible for all types of taxpayers.
Individuals and companies can also approach TIN Facilitation Centres set up by Protean/NSDL in various cities for physical assistance with documentation and form submissions.
Visit the Official NSDL Portal to start your application OR Contact Diligence certifications
Who Must Apply for a TAN Number?
Any entity involved in tax deduction or collection must have a TAN. These include:
- Salaried employers who deduct TDS from salaries paid to employees.
- Businesses and startups issuing payments above threshold limits subject to TDS.
- NGOs and Trusts engaged in professional payments or salaries.
- Banks and Insurance Companies that deduct TDS on interest income.
- Government departments (Central, State, Local) that make taxable payments.
- Contractors, Consultants, and Commission agents handling subcontractors.
- Hindu Undivided Families (HUFs) engaging in commercial operations.
- Proprietorship firms and LLPs that need to comply with TDS requirements.
Functions of TAN Registration Number
1. Legal Adherence
TAN provides assurance of adherence to all legal TDS/TCS obligations under the Income Tax Act. A deductor without TAN quoted on return forms is liable for penalties and even rejection. Section 203A expressly states Tan must be quoted on every TDS return, in any Form 24Q, 26Q and in the tax payment challans.
2. Unique Tracking
Every TAN is a unique tracking number. This helps the Income Tax Department verify whether the taxes deducted at source have been duly paid, and match them to the PAN of the deductee. With this system, the Income Tax Department can verify that taxes have been paid, and thus protect the integrity of the tax environment by minimizing evasion.
3. Easy Fraud Verification
Any TAN may be verified at any time on the e-filing portal. This should aid in avoiding mistakes or reporting errors on TDS returns, or issuing TDS certificates. An employer or contractor can confirm that the TAN provided by a vendor is not obtained fraudulently or incorrectly.
4. Avoiding fines
Section 272B states that quoting a wrong/invalid TAN can land a deductor with a fine of not less than Rs 10,000. Properly referencing the correct TAN in every tax document ensures that the deductor does no incur unnecessary fines and penalties, and does not initiate a notification.
5. All communication with the Income Tax Department regarding TDS, including notices, refunds, rectifications, etc., must include a valid TAN. TAN is considered an identifier proof for the deductor, which should also include the correctness of PAN.
Uses of TAN Number
TAN is used in multiple scenarios, such as:
- Filing quarterly TDS/TCS returns, which include payments made to employees, contractors, professionals, etc.
- Generating Form 16/16A, which are certificates of tax deducted.
- Making timely TDS payments through authorized banks.
- Ensuring proper credit is reflected in deductees’ Form 26AS.
- Communicating with tax authorities when responding to TDS-related notices.
- E-filing of TDS returns which is now mandatory for most deductors.
- Tracking and claiming refunds for any excess TDS deduction.
TAN is central to India’s modern tax administration system and helps maintain tax discipline across sectors.
People Responsible for TAN Application
- Securing a TAN is not specifically a company obligation. There may be a number of participants:
- Tax Deductors – Employers, businesses or professionals making payments which are subject to TDS.
- Chartered Accountants and Tax Consultants – Generally authorized representatives and assist in applying and complying with TAN applicable / responsibility for clients.
- Finance and Payroll Teams – In a company, these departments will maintain TAN obligation and confirm that TAN has been quoted in salary slips and tax documentation.
- Government representatives – In public sector units, the head of the department or finance officer is accountable for obtaining TAN.
- Start-Ups & MSMEs – Must make themselves compliant early on them in the venture – or risk penalties down the road.
How to Get TAN Number: Application Process
Step-by-Step TAN Registration:
- Visit the NSDL TAN application portal
- Select ‘Online Application for TAN (Form 49B)’
- Fill in all required details such as Category of Deductor, Name, Address, AO Code, etc.
- Pay fees of Rs. 65 (Rs. 55 + GST) using debit card, credit card, or net banking.
- Submit the application form online. Acknowledgement with a unique number will be generated.
- Verification: If you opted for DSC mode, complete verification online. Otherwise, submit a signed physical copy.
- Receive TAN: Typically within 5–10 working days via email or post.
Use DSC (Digital Signature Certificate) to expedite verification and avoid postal delays.
How to Find TAN Registration Number
Forgot your TAN? You can retrieve it online by following these steps:
- Go to the Income Tax e-Filing portal
- Navigate to the “Know Your TAN” section
- Enter details like your Name, State, and Category of deductor
- Click Submit
- A list of matching records will appear. Choose the correct one.
- View and verify the full TAN details, including jurisdiction and AO code.
This feature is helpful for organizations managing multiple TANs across branches or locations.
Advantages of TAN Number
- Mandatory for TDS: Required by law for every tax deductor under Section 203A.
- Avoids legal penalties: Non-compliance can lead to fines and prosecution.
- Easy tracking and reporting: Ensures accurate tax credit to the deductee.
- Simplifies payroll and accounting: Used in Form 16, 16A, and salary TDS deductions.
- Supports refund claims and audits: Proper TDS compliance helps during audits and while processing income tax refunds.
Disadvantages of TAN Number
While TAN is necessary, it can also create operational challenges:
- Compliance complexity: Filing quarterly returns, issuing certificates, and tracking deadlines requires expertise.
- Penalties for non-compliance: Errors in quoting or failure to file returns can result in significant penalties.
- Additional cost: CA fees, software licenses for e-filing, and internal manpower.
- Jurisdiction-based issues: If a company operates in multiple states, it may need separate TANs, increasing administrative burden.
- Not globally recognized: TAN is valid only in India; it holds no relevance for international tax matters.
Conditions That May Lead to TAN Rejection
- Incorrect form filling: Form 49B submitted with wrong AO code or incomplete information.
- Duplicate TAN application: A business entity cannot apply for multiple TANs unless it’s for different branches.
- Improper payment gateway: Online fee not processed correctly or failed transactions.
- Mismatch in documentation: Discrepancy in PAN details and business name.
Always double-check your application before submission to avoid delays or rejections.
Penalties for not having a TAN.
According to Section 272B of the Income Tax Act, if a person takes no action to obtain a TAN or if a person invokes the wrong TAN in a return or in the challan, regardless of how it arose, a penalty of 10,000 INR will be applicable in this case. Where no relevant TAN is quoted and TDS is deposited, it will not be deemed valid or accepted as a valid deposit by the department.
If a taxpayer continues to take this action, they may be called in scrutiny, audit or may be able to amass a serious penalty, especially if the company moves millions of rupees.
Get Expert Help with TAN Registration – Contact Diligence Certifications
If you are not certain where to get your TAN number, or need help tracking down your TAN registration number, you are not the only one. Many businesses and individuals struggle to navigate the NSDL portal, or find the information they need. It is easy to understand why businesses and individuals get confused now whether they need to apply for a new TAN number, or even have an existing TAN number to retrieve. The process can be difficult to understand, but if you want professional help, you can always call Diligence Certifications. Diligence Certifications, will help you through step-by-step navigation – from applying for a TAN registration number to resolving issues with TDS compliance.
Conclusion.
TAN or Tax Deduction and Collection Account Number, is a key pillar of tax compliance system in India by building traceability, accountability, and compliance for every entity required to deduct or collect tax at source. With a popularly applied and stated TAN, taxpayers can avoid potential legal problems, have a timely and compliant return filing, and a result of improved compliance metrics associated with a legal entity in the financial ecosystem.
In today’s digital-first economy, tax compliance is not just good practice – it is a competitive statistic. Whether you’re owning or operating a SME, whether you’re a payroll executive, or whether you’re a finance manager – you want to make sure the entity’s TAN is prepared, valid, updated and applied correctly.
Frequently Asked Questions
What does Tan stand for in India?
A TAN number (Tax Deduction and Collection Account Number) is a 10- digit alphanumeric number is mandatory to comply with TDS/TCS in India.
Why is a TAN registration number mandatory?
TAN registration number has to be legally mentioned while deducting or collecting tax at source & filing TDS returns with the Income Tax Department.
Who applies for TAN number?
Any individual, companies, trusts or government bodies that deduct TDS or collect TCS has to apply for TAN number.
How to obtain TAN number online?
TAN number can be applied from the NSDL or UTIITSL website by filling Form 49B and paying a nominal fee.
How much time does it take to get a TAN registration number?
You will usually receive your TAN registration number within 7 to 15 working days of applying.
Is it compulsory to quote the TAN number in TDS filings?
Yes, valid TAN number quoting is compulsory while submitting TDS returns, challans, and while issuing Form 16, etc.
How to find TAN registration number of a company or entity?
You can find any company’s TAN registration number by using the NSDL TAN search tool and entering PAN or acknowledgement number.
Can I apply for a TAN registration number without a digital signature?
Yes, DSC is optional. You can physically sign the acknowledgment and send it in the post for TAN approval
Is TAN registration number is permanent?
Yes, the allotted TAN registration number remains with you for lifetime unless surrendering to or cancelling to the competent authority officially.
