TAN

TAN, or Tax Deduction/Collection Account Number, is a 10-character alphanumeric code issued by the Income Tax Department. Anyone responsible for deducting or collecting tax at source is required to have a TAN. This includes entities such as companies, firms, sole proprietors, government bodies, NGOs, and individuals who must withhold TDS on payments like rent, salaries, or contractor fees. The TAN appears on documents such as TDS and TCS returns, challans used for depositing the deducted tax, TDS certificates, and correspondence with the tax department. Without this number, a person or entity cannot legally submit TDS returns or issue TDS certificates.

Example: If XYZ Pvt. Ltd. deducts TDS from salaries and contractor payments, it must obtain a TAN—for example, BLRX12345A. The company then uses this number to deposit the deducted tax through Challan 281, file quarterly TDS statements, issue Form 16/16A, and ensure that the deducted amounts are properly reflected in the recipients’ PAN records.