Any business or individual required to deduct or collect tax at source under the Income Tax Act, 1961 must first obtain a Tax Deduction and Collection Account Number, commonly known as TAN. Without it, TDS and TCS returns cannot be filed, banks will not accept TDS challans, and TDS/TCS certificates cannot be issued to the persons from whom tax has been deducted.
TAN registration is a short, largely paperless process, but it is also a step many new businesses either delay or get wrong, most often by confusing TAN with PAN or by applying only after a TDS liability has already arisen. This guide explains exactly who needs a TAN, the current 2026 application fee and process through Form 49B, the documents involved, and the penalty for skipping this requirement.
At LegalDev, our team prepares and files the TAN application correctly the first time, so that your business can start deducting and depositing TDS without delay.
TAN is a unique 10-digit alphanumeric number issued by the Income Tax Department to every person or entity responsible for deducting or collecting tax at source. It is issued under Section 203A of the Income Tax Act, 1961, read with Rule 114A of the Income Tax Rules, 1962, and once allotted, it does not need renewal — TAN carries lifetime validity.
TAN must be quoted on every TDS and TCS return, every TDS/TCS payment challan, and on certificates such as Form 16, Form 16A, and Form 27D. It also has to be quoted in all correspondence with the Income Tax Department relating to TDS and TCS matters. A business is typically required to deduct tax at source on payments such as salaries above the exemption threshold, rent above the prescribed limit, professional or technical fees, contractor payments, and commission, among other specified categories.
TAN and PAN are frequently confused, but they serve entirely different purposes. PAN (Permanent Account Number) identifies a taxpayer for income tax purposes and financial transactions. TAN identifies the deductor or collector of tax at source. A business needs both: PAN to file its own income tax return, and TAN to deduct tax on payments made to others and to file TDS/TCS returns. Using a PAN in place of TAN on a TDS challan or return is not a valid substitute and can invite the same penalty as not holding a TAN at all.
There is one limited exception: for TDS on the purchase of immovable property under Section 194-IA, and on rent payments by certain individuals under Section 194-IB, the buyer or tenant uses their own PAN instead of a TAN, and deposits the tax through Form 26QB or Form 26QC respectively.
Any person responsible for deducting tax at source (TDS) or collecting tax at source (TCS) is required to obtain a TAN before doing so. This commonly includes:
A single deductor should not hold more than one TAN for the same set of TDS records; however, different branches or divisions of the same organisation may hold separate TANs where each deducts and deposits tax independently.
Application fee: The current TAN application fee is ₹77 (inclusive of applicable GST), payable online at the time of filing Form 49B on the Protean (formerly NSDL e-Governance) portal. There is no separate charge levied by the Income Tax Department for the actual allotment of TAN — the ₹77 covers the processing fee only.
Documents required: TAN allotment under Form 49B does not require supporting documents to be uploaded for most applicants; the signed physical acknowledgment alone is typically sufficient to complete the online process. That said, it is advisable to keep the following ready, since consultants and TIN Facilitation Centres may request them for verification, and they are needed to correctly fill the application:
TAN is applied for using Form 49B, filed online through the Protean (formerly NSDL) portal, which continues to be the designated agency for TAN processing on behalf of the Income Tax Department.
Businesses that prefer not to handle the courier and follow-up steps themselves often engage a consultant to manage the entire filing and tracking process, which is where LegalDev's TAN registration service is typically used.
Section 272BB of the Income Tax Act, 1961 sets out the consequences of non-compliance:
Because the penalty applies per default rather than as a single one-time fine, a business that has filed multiple TDS challans without a valid TAN, or with an incorrect one, can face this penalty repeated across each instance. Beyond the direct penalty, an invalid or missing TAN also causes TDS returns to be rejected by the system, which can trigger further consequences, including late-filing fees under Section 234E and additional penalties under Section 271H for delayed TDS/TCS statement filing.
Does every branch need a separate TAN? Not necessarily. A head office can operate under a single TAN if all TDS deductions across branches are centrally processed and deposited. However, where a branch independently deducts and deposits TDS on its own payments, it typically applies for its own TAN.
What if there's an error in an existing TAN? If details on an already-allotted TAN are incorrect, such as the entity name or address, the correct route is to file a TAN correction request rather than applying for a fresh TAN. Holding more than one TAN for the same deductor is not permitted.
Is TAN required before making the first TDS deduction? Yes. The deductor must hold a valid TAN before deducting tax at source, since the number is required at the time of depositing the TDS challan and later while filing the quarterly TDS return.
LegalDev's compliance team handles TAN applications for companies, LLPs, partnership firms, and proprietorships across India. Our service includes:
TAN registration is the process of obtaining a Tax Deduction and Collection Account Number from the Income Tax Department, required by any person or entity responsible for deducting or collecting tax at source under Section 203A of the Income Tax Act, 1961.
For online applications filed through the Protean portal, TAN is typically allotted within 7 to 10 working days after the signed acknowledgment is submitted. Offline applications through a TIN Facilitation Centre may take longer.
Applications are processed by Protean eGov Technologies Limited (formerly NSDL e-Governance) on behalf of the Income Tax Department, which formally allots the TAN.
Failure to apply for TAN when required attracts a penalty of ₹10,000 under Section 272BB(1) of the Income Tax Act. TDS returns and challans also cannot be processed without a valid TAN.
Only where each branch independently deducts and deposits its own TDS. If deductions across branches are centralised through the head office, a single TAN can be used for all of them.
The application fee is ₹77 (inclusive of GST), payable online through the Protean portal at the time of filing Form 49B.
No, except in two specific cases: TDS on purchase of immovable property under Section 194-IA (using Form 26QB) and TDS on rent by certain individuals under Section 194-IB (using Form 26QC), where the payer's PAN is used instead of a TAN.