TAN (Tax Deducted at Source) Registration

TAN (Tax Deduction and Collection Account Number) is a 10-character alphanumeric number that every person who deducts or collects tax at source must obtain. It is quoted on all TDS/TCS challans, returns and certificates, and is separate from PAN.

Who needs this: Any employer, business or individual/HUF liable to deduct TDS (e.g., on salary, rent above ₹50,000/month, contractor payments, professional fees) must obtain a TAN before deducting.

Government portal: Protean (NSDL) TIN portal (tin-nsdl.com) — Form 49B, or the Income Tax e-filing portal.

Indicative fees: ₹65 government fee + ₹500–₹1,500 professional fees.

Timeline: 5–10 working days.

Documents required

Applicant's PAN
Name and address of the deductor
Details of the person responsible for deducting tax
Proof of business (incorporation/GST)

Step-by-step process

Determine whether your payments attract TDS (salary, rent, contractor, professional, commission, etc.)
File Form 49B online on the Protean TIN portal or through the e-filing portal
Pay the processing fee
Submit the acknowledgement (signed) if applying offline, or e-sign online
Receive the TAN allotment letter, usually within a week
Quote the TAN on all TDS challans, returns and Form 16/16A
Deduct TDS at the correct rate and deposit by the 7th of the next month
File quarterly TDS returns using the TAN

Penalty for non-compliance

Failing to obtain or quote TAN attracts a flat ₹10,000 penalty under section 272BB.

TAN is required the moment you must deduct, not when you incorporate

A Tax Deduction and Collection Account Number is needed by anyone required to deduct or collect tax at source. Quoting TAN is mandatory on TDS challans, returns and certificates, and it is distinct from PAN — you cannot use one in place of the other. Businesses often incorporate, begin paying rent, contractors or salaries, and only then discover the deduction obligation had already arisen.

The individual exceptions people rely on wrongly

Certain one-off deductions by individuals do not require a TAN: a buyer of immovable property deducting 1% under section 194-IA pays through Form 26QB using PAN, and similar challan-cum-statement routes exist for some other individual deductions. That exception is narrow. An individual or HUF carrying on business or profession above the prescribed thresholds is subject to the ordinary TDS regime and does need a TAN.

Deduct, deposit, file — three separate obligations

Deduction happens at credit or payment, whichever is earlier, which means an amount merely booked at year end can trigger it. Deposit is due by the 7th of the following month, with March allowed until 30 April. The quarterly return — 24Q for salary, 26Q for most other resident payments, 27Q for payments to non-residents — is what actually gives the payee credit in their Form 26AS. Satisfying two of the three still leaves your payee unable to claim.

What non-compliance costs

Late deduction attracts 1% per month under section 201(1A), and deduction followed by late deposit attracts 1.5%. A late return costs ₹200 per day under section 234E, capped at the tax deducted. Failing to quote TAN where required carries its own penalty. Behind all of it sits disallowance of the underlying expense when computing business income, which is usually the largest cost of the four.

Keep the details current

TAN records carry the deductor's name, address and responsible-person details, and changes must be updated — notices and portal communications go to what is on record. If you have inadvertently obtained more than one TAN, surrender the duplicate rather than using both, since returns filed under different TANs fragment your payees' credits. The TDS return filing service covers the quarterly cycle that follows.

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Frequently asked questions

What is the difference between PAN and TAN?

PAN identifies a taxpayer; TAN identifies a tax deductor. If you deduct TDS you must quote TAN (not PAN) on challans and returns — using PAN instead attracts a ₹10,000 penalty.

Who needs a TAN?

Anyone required to deduct or collect tax at source — employers, businesses, and individuals/HUFs liable to audit who pay rent, contractor or professional fees above the TDS thresholds.

Is a separate TAN needed for each branch?

A business can apply for separate TANs for different branches/divisions if they deduct TDS independently, but a single TAN can also cover the whole entity.

What is the penalty for not having a TAN?

Deducting or collecting tax without a TAN, or failing to quote it, attracts a penalty of ₹10,000 under section 272BB.

Can TAN details be changed?

Yes, through the TAN change/correction form on the TIN portal if the deductor's name, address or responsible person changes.