Skip to content
Tax Calculator

Rules 2026

TAN — Who Needs It and How to Apply

Every deductor needs a Tax Deduction and Collection Account Number. Here is who must apply, how the application works, and what happens if you do not have one.

Introduction

A Tax Deduction and Collection Account Number (TAN) is a 10-digit alphanumeric code that identifies every person who deducts or collects tax at source. If you pay salary, rent to a landlord, fees to a contractor, or interest on deposits — and that payment exceeds the TDS threshold — you need a TAN.

Key facts

Who needs a TAN

Any person responsible for deducting tax at source (a deductor) must obtain a TAN. This includes employers, businesses making contractor payments, tenants paying rent, and anyone making payments subject to TDS.

How to apply for TAN

Apply online at the NSDL TAN portal (tin.nsdl.com) or through TIN facilitation centres. You need a valid PAN, address proof, and identity proof. The application fee is ₹65 plus GST. TAN is issued within 15 working days.

TAN structure

TAN is a 10-character alphanumeric code: the first four characters are letters, the next four are numbers, and the last two are letters. Example: ABCD12345E. The first three letters identify the city or jurisdiction of the deductor.

TAN quotation requirement

Every TDS return, challan, and certificate issued by the deductor must carry the TAN. Failure to quote TAN in TDS returns attracts a penalty of ₹10,000 per failure under Section 272BB.

TAN vs PAN

PAN is for every taxpayer — individuals, companies, firms. TAN is only for deductors. If you receive income where TDS applies, you do not need a TAN — only the person paying you does.

Frequently asked questions

Can I use my PAN instead of TAN for TDS returns?
No. PAN and TAN serve different purposes. TDS returns (e-TDS returns on Forms 24Q, 26Q, 27Q) require TAN as the deductor identifier. Your PAN is the taxpayer identifier for your own income tax filings.

What is the penalty for not having a TAN when required?
The penalty for failure to apply for TAN or failure to quote TAN in TDS-related documents is ₹10,000 per failure under Section 272BB of the Income Tax Act 2025. The deductor must also pay TDS even if they do not have a TAN — the penalty is separate from the TDS liability.

How do I check if a TAN is valid?
Visit the NSDL TAN portal at tin.nsdl.com and use the 'TAN Search' facility. You can search by TAN or by deductor name. This helps verify that your deductor's TAN is genuine before you receive a TDS certificate.

Can one person have multiple TANs?
Yes. If you operate businesses in different cities or under different registrations, each TDS-deducting entity may need a separate TAN. However, one entity should have only one TAN. Multiple TANs for the same entity attract review by the TDS officer.

Is TAN required for TCS (Tax Collected at Source)?
Yes. TCS is the mirror of TDS — the seller collects tax from the buyer and deposits it. The seller needs a TAN to file TCS returns (Form 27EQ) and issue TCS certificates. TCS and TDS are two sides of the same compliance coin.

Sources

Last reviewed by FinWiz24 Research Desk.