TAN
What TAN means, where you will meet it and what it means for your business.
DefinitionA Tax Deduction and Collection Account Number (TAN) is the 10-character number every business that deducts or collects tax at source must hold and quote on TDS payments, returns and certificates.
The moment you pay a salary, rent, professional fees or contractor bills above the threshold, you must deduct TDS, and you cannot deposit or report it without a TAN. Companies receive a TAN automatically with the Certificate of Incorporation; proprietors, firms and LLPs apply through Form 49B on the NSDL or income tax portal for a small fee, and it arrives in about a week. One TAN covers all branches unless you want separate ones. You meet it on every TDS challan, on the quarterly 24Q and 26Q returns, on Form 16 and 16A, and on the TRACES portal login. What it means for you: deducting tax without a TAN, or quoting a wrong one, means the credit does not reach the payee's Form 26AS, and there is a penalty for not applying when required.