TAN (Tax Deduction and Collection Account Number): meaning and rules
TAN is the 10-character number every person deducting or collecting tax at source must hold and quote in TDS payments, returns and certificates.
Short answer
TAN (Tax Deduction and Collection Account Number) is a 10-character alphanumeric number issued by the Income Tax Department to every person who must deduct or collect tax at source. It must be quoted in all TDS and TCS payments, quarterly statements and certificates. Under the Income-tax Act, 2025, the TAN requirement sits in section 397.
- Length
- 10 characters (4 letters, 5 digits, 1 letter)
- Provision
- Section 397, Income-tax Act 2025
- Companies
- Allotted through SPICe+ at incorporation
- Quoted in
- TDS/TCS challans, statements and certificates
Who needs a TAN
Any person responsible for deducting tax at source, such as an employer paying salary, a company paying professional fees or rent, or a business paying contractors, must obtain a TAN before deducting tax. Sellers who must collect tax at source also need one. Companies and LLPs get TAN automatically during incorporation; others apply online through the authorised TAN service portal. A separate TAN can be obtained for each branch or division that deducts tax independently.
How TAN is used
The TAN identifies the deductor in the tax system, so credit for tax deducted flows correctly to the deductee's annual statement. It must be quoted when depositing TDS, when filing quarterly TDS statements, which under the 2026 rules use Forms 138, 140 and 144, and on TDS certificates in Forms 130 and 131. Payments and statements without a valid TAN can be rejected, and failing to obtain or quote TAN can attract penalties.
Why it matters for startups
A startup becomes a deductor as soon as it pays salaries above the exemption limit, professional fees, rent or contractor payments above the thresholds in section 393. Make sure the TAN from incorporation is active, register it on the TRACES and e-filing portals, and set up a monthly TDS process from your first payroll.
Related services
Sources
- Taxmann: TDS and TCS under the Income-tax Act 2025
- Income Tax Department e-filing portal
- Business Today: income-tax forms changing from 1 April 2026
Written by the Refogo Editorial Team from the official sources above and checked on 2026-10-31. Laws, rates and due dates change, and authorities often extend deadlines, so confirm your own case with a qualified professional. This is general information, not legal or tax advice. Read our editorial policy or report an error to support@refogo.com.
Common questions
Is TAN the same as PAN?
No. PAN identifies a taxpayer, while TAN identifies a person who deducts or collects tax at source. A company holds both.
Do individuals need a TAN to deduct TDS on property purchase?
Generally no. Buyers of immovable property and certain individual payers deduct and report using their PAN through the consolidated challan-cum-statement.
Can a TAN be surrendered?
Yes. A duplicate or unused TAN can be surrendered through the authorised TAN service portal.