TAN - Tax Deduction Account Number

TAN (Tax Deduction and Collection Account Number) is a 10-digit alphanumeric identifier issued by the Income Tax Department under Section 397 of the Income-tax Act, 2025 (the old Section 203A of the Income Tax Act, 1961). Any person or entity required to deduct tax at source (TDS) or collect tax at source (TCS) must obtain a TAN and quote it on all TDS/TCS returns, payment challans, and certificates such as Form 16 and Form 16A. It identifies the deductor/collector, and is separate from the PAN, which identifies the taxpayer.

Format

A TAN reads as four letters, five digits, and one letter (for example, DELM12345K). The first three letters denote the jurisdiction city code, the fourth letter is usually the first letter of the deductor's name, followed by a numeric block and a check letter.

How to apply

• Apply in Form 49B, online through the Protean (formerly NSDL) TIN portal or at a TIN-Facilitation Centre.
• One TAN covers both TDS and TCS obligations; a deductor generally needs only a single TAN per office/branch.
• No routine renewal is required, but changes (address, name) are updated through the TAN correction form.

Why it matters

Quoting a valid TAN is mandatory. Failure to apply for a TAN, or quoting an incorrect one where required, attracts a penalty of Rs 10,000 under Section 468 (the old Section 272BB). Banks will not accept TDS challans without a valid TAN, so obtaining it is a prerequisite before making any tax-deducted payment such as salary, rent, contractor fees, or interest.