What Is TAN? How to Apply for TAN in India

2025-06-14

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Individuals or businesses making salary payments are mandated to deduct tax. To deduct tax and file returns, you need a TAN. So, what is TAN? TAN stands for Tax Deduction and Collection Account Number. It is related to the deduction or collection of tax at source. PAN is different from TAN and cannot be used interchangeably. Everyone must have a PAN to file his/her IT returns whereas a TAN is required only if you deduct TDS or collect TCS.

Key Takeaways

TAN is essential for businesses and individuals involved in TDS/TCS processes
Ensure accurate data by updating your TAN whenever there are changes
Apply for TAN using Form 49B for new applications or corrections
Incorrect or missing TAN details can result in penalties and return rejections
Understand the difference between TAN and PAN to avoid compliance issues

What is TAN?

As per the Income-tax Act, every person/firm making a payment or crediting income of defined types has to deduct tax and deposit the sum so deducted with the government. All such persons/firms must possess a tax deduction account number (TAN).

TAN is a 10-digit alphanumeric number issued by the Indian Income Tax Department. A TAN number is essential for filing TCS/TDS. The first 4 digits of the TAN are alphabets followed by a numeric 5-digit number and finally an alphabet. The first 3 alphabets denote the jurisdiction code, 4th alphabet is the initial of the name of the TAN holder who can be a company, firm, individual, etc. For example, the TAN allotted to Ramesh of Bangalore may appear as BLR R 12345 C.

Who Needs TAN?

In line with section 203A of the Indian Income Tax Act 1961, every business or individual that deducts or collects tax at source should have TAN. Section 272BB(1) penalises the business or individual if a TAN is not obtained or applied for. Both government and non-government deductors are mandated to hold TAN. However, if you are deducting tax under section 194-IA, a TAN is not required. You may use PAN instead. TAN is not needed in cases where you deduct tax under sections 194-IB or 194M.

The income tax department also mandates quoting (wherever applicable) TAN in all TDS/TCS returns, payment challans and certificates that are issued. Non-compliance may attract a penalty as per applicable provisions. If TAN is not quoted, the returns filed will be declined and banks will not accept the challans for TDS/TCS deposits.

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How to Apply for TAN?

You may apply for a TAN online or using a conventional, physical form. No documents are required to be enclosed with the application for TAN. The procedure applicable to each is listed below:

Offline: Form 49B should be filled (in duplicate) and submitted at any of the Tax Information Network (TIN) Facilitation Centres (FCs). TIN-FC addresses are available on the website of the National Securities and Depository Limited (NSDL)-TIN.

Online: Go to the NSDL-TIN website, complete Form 49B and submit it. When submitting the online application, you will see an acknowledgement on the screen. The acknowledgement consists of a unique 14-digit acknowledgement number, the status of the application, name, contact info, payment details and space for signature. After applying online, the acknowledgement that is generated after submitting the form must be sent to NSDL. Based on your application, NSDL will communicate the status to you at your registered communication address.

You are then required to pay a processing fee of ₹.55 + GST via demand draft/cheque/E-payment.

How to Use TAN?

A single TAN can/must be used for all types of deduction and collection. Different TANs are not required to deduct tax from different types of payments such as salary, interest etc. In line with the provisions of section 203A, quoting TAN is mandatory in TDS/TCS statements, accounts statements, challans for TDS/TCS deposits and TDS/TCS certificates.

Quoting TAN in all documents about TDS is mandatory. Correspondence, without TAN, with the IT department may not be entertained.

How to Check your TAN Number?

A step-wise flow is listed below to help you navigate the site to know your TAN number.

Log on to https://www.incometax.gov.in/iec/foportal/
Click on 'Know TAN Details' under 'Quick Links’
Search using the name or TAN number. Choose the category and state. Enter the mobile number
Click 'Continue' to receive the OTP on the entered mobile number
Enter the OTP and click on 'Validate' to view the TAN details

Digitisation has eased the process of applying for TAN and filing returns. You can submit TAN Applications and TDS returns online. Filing TDS returns on time helps the government prevent people from evading taxes. The IT department keeps track of the TDS return and whether an income tax assessee has disclosed the income in their IT return or not. When the TDS return is filed by the deductor then the deductees will get the credit of tax paid by the deductor in their income tax return.

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised to exercise caution and not to rely on the contents of the article as conclusive in nature. Readers should research further or consult an expert in this regard.

Did You Know?

Section 272BB dictates a ₹10,000 charge for both lacking a TAN application and its absence from required submissions.

Source: Indiafilings

Types of TAN Applications

When dealing with the Tax Deduction and Collection Account Number (TAN), it's important to know that for different purposes, there are different application structures of TAN. Depending on your situation, you'll need to submit a specific kind of request to the Income Tax Department. The following are the types of TAN applications:

Application for Allotment of New TAN

Use this form if you or your entity has to deduct or collect tax at source for the first time and does not hold a TAN. A clear understanding of what TAN is and its purpose in facilitating TDS/TCS compliance clarifies why applying for allotment is necessary. This application is submitted using Form 49B, and once processed, you will receive a unique 10-digit TAN.

Application for Change or Correction in TAN Data

In case you already possess a TAN but need to update the information associated with it, you’ll need the application for change or correction of data. It can be a change of address, contact details, the responsible individual’s name, etc. Submitting this application is essential to ensure that the Income Tax Department (IT Department) has accurate information regarding your TAN.

While the unique structure of TAN (the 10-digit alphanumeric code) remains the same, the background data gets updated. There's a specific form/process for these corrections, distinct from applying for a brand-new number. Keeping this data updated is also crucial for seamless communication and compliance.

Application for Cancellation of TAN

In situations where the requirement to deduct or collect tax goes out of the picture permanently, you can apply for the cancellation of your TAN. For example, the business may be shutdown, or there may be no further requirement for TDS or TCS.

This involves submitting a specific application to the assessing officer, detailing the reasons for cancellation. An assessing officer will cancel the TAN only if satisfied that it is no longer required. You cannot hold multiple TANs. If duplicates were allotted, you must apply to cancel the unnecessary ones to avoid any legal repercussions.

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Difference Between TAN and PAN

While both TAN and PAN (Permanent Account Number) are 10-digit alphanumeric codes issued by the Income Tax Department, they serve very different purposes. They are not interchangeable and often this confusion leads to compliance issues. Here’s a clear overview of what is the structure of TAN and how it is different from PAN:

Feature	TAN (Tax Deduction and Collection Account Number)	PAN (Permanent Account Number)
Purpose	Used for Tax Deduction at Source (TDS) and Tax Collection at Source (TCS)	Used for tracking income tax returns and financial transactions
Structure	10-character alphanumeric (e.g., BLRR12345C)	10-character alphanumeric (e.g., ABCDE1234F)
Who Needs It?	Businesses, employers, government departments, and financial entities are involved in the deduction of TDS and TCS	Individuals, businesses, and entities filing income tax or conducting financial transactions
Usage	Mandatory for filing TDS/TCS returns, issuing tax certificates, and depositing deducted tax	Used for tax filing, high-value transactions, and opening bank accounts
Application Form	Form 49B	For those applying as individuals, form 49A is required, and for foreign entities, form 49AA is necessary
Validity	Lifetime validity but requires updating if details change	Lifetime validity and does not require renewal

Conclusion

Once you gain clarity over the fact that what is TAN and how it functions, you can understand tax compliances easily. TAN plays a significant role in the structure of TAN deduction processes, ensuring that tax collection at source is managed effectively.

For businesses, employers, and entities dealing with TDS/TCS, obtaining and quoting TAN correctly is mandatory. Failing to do so can lead to penalties and legal complications. Similarly, knowing the difference between TAN and PAN ensures smooth financial operations without unnecessary confusion.

Whether applying for a new TAN, updating details, or surrendering an extra TAN, following the proper process ensures seamless compliance with tax regulations. If you are unsure about your TAN requirements, consider consulting a tax professional or using online tools to simplify the process.

Stay informed and compliant!

Glossary

PAN (Permanent Account Number): A 10-digit number used for tracking income and financial transactions, different from TAN.
TDS (Tax Deducted at Source): Tax withheld by the payer from the payment to the payee, remitted to the government.
TCS (Tax Collected at Source): Tax collected by the seller from the buyer at the time of the transaction.
Form 49B: The application form for obtaining TAN for new applicants or for changes.
TIN (Tax Information Network): A nationwide system for managing tax-related data, including TAN issuance.

FAQs

To apply for a new TAN, submit Form 49B either online or at TIN Facilitation Centres (TIN-FCs).

You can use PAN instead of TAN only in specific cases under sections 194-IA, 194-IB, or 194M of the Income Tax Act.

To correct your TAN details, submit a Form 49B application to the IT department, providing updated information.

Failing to quote your TAN in TDS/TCS returns can result in the rejection of returns and penalties.

You can check your TAN status by visiting the Income Tax website and using the ‘Know TAN Details’ service.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.