🇮🇳 India · Guide

TAN — What It Is and Who Needs It

TAN is often confused with PAN, but they serve completely different purposes.

Last reviewed 24 Jul 2026

PAN vs TAN

	PAN	TAN
Full form	Permanent Account Number	Tax Deduction and Collection Account Number
Who needs it	Every taxpayer — individuals, businesses	Anyone who deducts or collects tax at source (employers, businesses making certain payments)
Used for	Filing your own tax returns, financial transactions	Filing TDS/TCS returns, issuing TDS certificates like Form 16
Format	10-character alphanumeric	10-character alphanumeric (different structure)

Who needs to apply for TAN

Businesses that pay salaries and deduct TDS on employee income
Anyone required to deduct TDS on rent, professional fees, contractor payments, etc. above specified thresholds
Not required for individuals filing personal tax returns — that's what PAN is for

Consequences of not having TAN when required

Failing to obtain TAN when required to deduct TDS attracts a penalty. Quoting an incorrect or missing TAN on TDS returns can also delay processing and cause your deductees' tax credit to not reflect correctly.

GENERAL GUIDANCE

If you run a business and aren't sure whether you need a TAN, consult a CA — the threshold and applicability depend on the type of payment you're making.