TAN
TAN is the 10-character Tax Deduction Account Number every TDS/TCS deductor must quote; apply via Form 49B; ₹10,000 penalty for non-compliance.
Definition
TAN (Tax Deduction and Collection Account Number) is a 10-character alphanumeric number (format: 4 letters, 5 digits, 1 letter — e.g., DELA12345B) issued by the Income Tax Department to anyone required to deduct tax at source (TDS) or collect tax at source (TCS). It must be quoted on every TDS/TCS challan, return, and certificate — quoting PAN in its place is not allowed for regular deductors.
Every employer, company, firm or individual liable to deduct or collect tax needs a TAN. The key exceptions where PAN suffices and no TAN is needed: an individual buying property worth ₹50 lakh or more deducting TDS under Section 194-IA (paid with Form 26QB), a tenant paying rent above ₹50,000 per month deducting under Section 194-IB (Form 26QC), and payments to contractors/professionals by certain individuals under Section 194M (Form 26QD).
Apply through Form 49B — online via the Protean (formerly NSDL) TIN portal or offline at a TIN facilitation centre — for a small fee (around ₹65-77). No documents are needed for the online application beyond the acknowledgment; the TAN is then registered on the TRACES and e-filing portals for filing TDS returns and downloading certificates like Form 16/16A.
Failure to obtain a TAN, or quoting an incorrect TAN, attracts a penalty of ₹10,000 under Section 272BB. A practical pitfall: banks reject TDS challans without a valid TAN, and TDS returns cannot be filed at all, which then triggers separate late-filing fees under Section 234E — so obtain the TAN before the first deduction is due.
Example
When Meera's startup hired its first employees in 2026, it applied for a TAN using Form 49B on the Protean portal before running payroll, since TDS on salaries cannot be deposited without one.
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Sources
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