How to Apply for TAN Number

A Tax Deduction and Collection Account Number (TAN) is a unique 10-digit alphanumeric identifier issued by the Income Tax Department of India to entities responsible for deducting or collecting tax at source (TDS/TCS). Whether youre an employer, a bank, a financial institution, or a business making payments subject to TDS, obtaining a TAN is not just a legal requirementits a foundational step in maintaining compliance with Indias tax framework. Without a valid TAN, you cannot file TDS returns, issue TDS certificates, or make tax payments, which can lead to penalties, disallowance of expenses, and operational disruptions. This comprehensive guide walks you through the entire process of applying for a TAN number, from eligibility checks to final approval, with actionable steps, expert best practices, essential tools, real-world examples, and answers to frequently asked questions.

Step-by-Step Guide

Applying for a TAN is a straightforward digital process, designed for efficiency and transparency. The entire application can be completed online through the NSDL TIN portal, eliminating the need for physical visits or paper submissions. Follow these seven precise steps to secure your TAN without delays or errors.

Step 1: Confirm Eligibility for TAN

Before initiating the application, ensure your entity qualifies for a TAN. You are required to obtain a TAN if you are responsible for deducting tax at source under Chapter XVII-B of the Income Tax Act, 1961. Common entities include:

• Employers who pay salaries to employees
• Companies making payments for professional services, rent, interest, or commission
• Banks and financial institutions paying interest to depositors
• Real estate developers making payments to contractors
• Government departments and public sector undertakings

If you are only collecting tax at source (TCS), such as a seller receiving payment for goods above specified thresholds, you also need a TAN. Sole proprietors, partnerships, LLPs, corporations, trusts, and even non-resident entities making taxable payments in India must apply. If you are unsure, review Section 203A of the Income Tax Act or consult your chartered accountant.

Step 2: Gather Required Documents and Information

Preparing accurate documentation in advance prevents application rejection. You will need the following details:

• Full legal name of the deductor (as per registration documents)
• Address of the office or principal place of business
• PAN of the applicant (mandatory for individuals, companies, and firms)
• Contact details: phone number and email address
• Category of deductor (e.g., Company, Government, Individual, Trust, etc.)
• Mode of payment (whether you will deduct TDS on salary, interest, rent, etc.)
• State and district where the office is located

For corporate entities, you must have the companys PAN and Certificate of Incorporation handy. For trusts or NGOs, the registration certificate under Section 12A or 80G may be referenced. Ensure all names match exactly with official recordsany discrepancy may trigger verification delays.

Step 3: Access the Official TAN Application Portal

Navigate to the NSDL TIN website at https://www.tin-nsdl.com. From the homepage, locate the TAN section under Online Services. Click on Apply for TAN Online. This redirects you to the TAN application form page hosted by NSDL on behalf of the Income Tax Department.

Do not use third-party websites or unverified portals. Only the NSDL portal is authorized to process TAN applications. Bookmark this link for future reference. Ensure you are using a secure, up-to-date browser (Chrome, Firefox, or Edge recommended) and disable pop-up blockers for seamless navigation.

Step 4: Fill Out Form 49B

Form 49B is the official application form for TAN. It has 16 fields requiring precise input. Heres how to complete it accurately:

1. Applicant Type: Select from the dropdown: Company, Firm, HUF, Trust, AOP, BOI, Government, Local Authority, Artificial Juridical Person, or Individual.
2. Name of Deductor: Enter the full legal name as registered with the Registrar of Companies or other governing authority. Avoid abbreviations.
3. Address: Provide complete address including pin code. Do not use PO Box or generic addresses.
4. PAN of Applicant: Enter the 10-digit PAN. The system will auto-validate the PAN format and name.
5. Category of Deductor: Choose the category that best describes your primary TDS obligation (e.g., Salary, Interest, Rent, etc.). You may select multiple categories.
6. State and District: Select from the dropdown menus. The district should correspond to the location of your principal office.
7. Telephone Number and Email Address: Provide a working landline/mobile number and active email. This is where communication regarding your application will be sent.
8. Details of Authorized Person: If applying on behalf of a company or trust, provide the name, designation, PAN, and contact details of the authorized signatory.
9. Mode of Payment: Indicate whether you deduct TDS on salary, interest, commission, rent, or other specified payments.
10. Number of TDS Deductors: For entities with multiple branches, indicate the total number of offices from which TDS is deducted.

Double-check every field. Typos in names, incorrect PANs, or mismatched addresses are the most common reasons for application rejection. Use capital letters for all entries as per the form guidelines.

Step 5: Submit and Make Payment

After completing the form, click Submit. You will be directed to a payment gateway. The application fee is ?65 (inclusive of GST) for Indian applicants. Payment can be made via:

• Debit or Credit Card (Visa, MasterCard, RuPay)
• Net Banking (through major Indian banks)
• UPI (via supported apps like PhonePe, Google Pay, Paytm)

Ensure the payment is completed successfully. A payment confirmation screen and transaction ID will be displayed. Save this receipt. If the payment fails, retry using a different method. Do not resubmit the form unless the payment is confirmedduplicate submissions may cause processing delays.

Step 6: Receive Acknowledgment and Track Status

Upon successful payment, you will receive a 14-digit acknowledgment number. This number is critical for tracking your application. Note it down and store it securely. You will also receive an email and SMS confirmation sent to the contact details provided.

To track your application status:

1. Return to the NSDL TIN portal.
2. Click on Status Track under the TAN section.
3. Select TAN Application Status.
4. Enter your acknowledgment number and captcha code.
5. Click Submit.

Status updates typically appear within 37 working days. Possible statuses include Application Received, Under Process, TAN Allotted, or Application Rejected. If rejected, the portal will specify the reasoncommon causes include mismatched PAN, incomplete details, or duplicate applications.

Step 7: Receive and Verify Your TAN

Once your application is approved, your TAN will be generated and sent to your registered email address in PDF format. The TAN format is always 10 characters: four alphabets, five digits, and one alphabet (e.g., ABCD12345E).

Verify the TAN by:

• Matching the name and address on the TAN allotment letter with your official records
• Confirming the TAN format is correct
• Checking the status on the Income Tax Departments TAN verification portal: https://www.incometax.gov.in/iec/foportal/services/tan-verification

Download and print two copies. Store one copy digitally and one physically. Register your TAN with your accounting software, payroll system, and bank for TDS payments. Never share your TAN publiclytreat it like a confidential financial identifier.

Best Practices

Applying for a TAN is simple, but small oversights can lead to delays or compliance risks. Adopt these best practices to ensure a smooth, error-free process.

Use Official Sources Only

Always use the NSDL TIN portal or the Income Tax Departments official website. Avoid third-party agents or websites offering TAN assistance for fees. Many fraudulent portals collect application fees without submitting forms or deliver fake TANs. Verify the URL: it must be tin-nsdl.com or incometax.gov.in.

Match All Names Exactly

Your TAN name must match your PAN name and legal registration documents. For example, if your company is registered as ABC Tech Solutions Private Limited, do not apply as ABC Tech Pvt. Ltd. or ABC Solutions. Even minor deviations like missing Private or Limited can trigger rejections. Cross-check your incorporation certificate, GST registration, or bank account name before submitting.

Apply Early, Even Before First Deduction

It is mandatory to obtain a TAN before making your first TDS payment. Delaying application until after youve deducted tax can result in penalties under Section 272B of the Income Tax Act, which imposes a fine of ?10,000 for non-obtainment of TAN. Proactively apply as soon as your business structure is finalized and you anticipate TDS obligations.

Keep Digital and Physical Copies

Store your TAN allotment letter in multiple secure locations. Save a PDF copy in your cloud storage (Google Drive, Dropbox), on your company server, and on a physical backup drive. Also, print and file a hard copy with your accounting records. This ensures access during audits, bank verifications, or TDS return filings.

Update Contact Information Promptly

If your email, phone number, or business address changes after obtaining your TAN, update it through the TAN modification form on the NSDL portal. Failure to do so may cause you to miss critical notifications regarding TDS return deadlines, notices, or compliance alerts.

Link TAN with PAN and GST

Ensure your TAN is linked to your PAN in the Income Tax e-Filing portal. Also, if you are GST-registered, ensure your TAN is reflected in your GST profile under Tax Deductors. This integration helps streamline reporting and avoids duplication of data across platforms.

Train Your Finance Team

If multiple people handle payroll, vendor payments, or accounting, train them on TAN usage. Ensure they know where to find the TAN, how to quote it on TDS certificates (Form 16, 16A), and how to use it when making payments via Challan 281. A single error in quoting TAN can cause the payment to be rejected by the bank or the IT department.

Set Calendar Reminders for Renewal and Compliance

TAN does not expire. However, you must file quarterly TDS returns and make timely payments. Set reminders for due dates: 31st July, 31st October, 31st January, and 31st May each year. Use accounting software like Tally, QuickBooks, or ClearTax to automate TDS calculations and return filings based on your TAN.

Tools and Resources

Several digital tools and official resources simplify TAN application, verification, and ongoing compliance. Leverage these to reduce manual effort and improve accuracy.

Official Tools

• NSDL TIN Portal https://www.tin-nsdl.com The only authorized platform to apply for or modify TAN.
• Income Tax e-Filing Portal https://www.incometax.gov.in For linking TAN with PAN, viewing TDS credit, and filing returns.
• TAN Verification Tool https://www.incometax.gov.in/iec/foportal/services/tan-verification Verify TAN validity instantly using the 10-digit number.
• Challan 281 Available on the e-Payment portal for depositing TDS using your TAN.

Third-Party Tools

• TallyPrime Integrates TAN into accounting workflows. Automatically generates TDS reports and prepares e-TDS returns.
• ClearTax Offers guided TAN application, TDS return filing, and compliance calendar features.
• Zoho Books Allows users to input TAN and auto-calculate TDS on vendor and employee payments.
• QuickBooks India Supports TAN-based TDS tracking and integration with GST and payroll modules.

Downloadable Resources

• Form 49B PDF Available on NSDL for offline reference.
• TDS Rates Chart Updated annually by CBDT; available on income tax website for accurate deduction calculations.
• TAN User Manual NSDL provides a detailed PDF guide explaining each field in Form 49B.

Mobile Apps

• Income Tax India e-Filing App Official app by CBDT for tracking TDS, TAN status, and returns on mobile.
• GSTN App Useful for businesses with both GST and TDS obligations to cross-check entity details.

PDF Templates

Download and use these templates for internal recordkeeping:

• TAN Register Template Log all TANs issued to branches or departments
• TDS Certificate Template Pre-filled with your TAN for issuing Form 16/16A
• Challan 281 Checklist Ensures TAN, PAN, and payment details are correctly entered

These templates are available on the NSDL and CBDT websites under Downloads or through your accounting software provider.

Real Examples

Understanding real-world scenarios helps clarify how TAN applies across different business types. Below are three practical examples illustrating correct TAN application and usage.

Example 1: Small IT Company Hiring Freelancers

TechNova Solutions, a Mumbai-based startup with 8 employees and 12 freelance developers, pays ?50,000 monthly to each freelancer. Under Section 194J, TDS at 10% is applicable on professional fees exceeding ?30,000 annually.

Before making the first payment, the founder applies for a TAN using Form 49B. They select Company as applicant type, enter the registered name exactly as per ROC, provide their directors PAN, and choose Professional Fees as the deduction category. Payment is made via UPI. Within five days, they receive their TAN: TECN12345A.

They update their payroll system (TallyPrime) with the TAN. Each month, they generate Form 16A for freelancers, quoting the TAN. They file quarterly TDS returns and deposit tax via Challan 281 using the same TAN. No penalties occur because they applied proactively.

Example 2: Real Estate Developer Paying Contractors

GreenBuild Constructions, an LLP registered in Hyderabad, pays ?20 lakh to contractors for construction work. Under Section 194C, TDS at 1% is mandatory if payments exceed ?30,000 in a financial year.

The LLPs partner applies for TAN, selecting Limited Liability Partnership as the category. They use the LLPs PAN and registered office address. The application is rejected once because the address entered was the residential address of the partner, not the registered office. They corrected the error, resubmitted, and received TAN: GRBL78901B.

They now include the TAN on all contractor payment vouchers and TDS certificates. During a tax audit, the auditor verifies the TAN against their TDS returns and confirms full compliance.

Example 3: NGO Receiving Foreign Donations

A registered trust in Delhi receives ?5 lakh from a foreign donor. Under Section 195, TDS at 20% applies to payments made to non-residents. The trust must deduct tax and obtain a TAN.

The trusts managing trustee applies using Form 49B, selecting Trust as the category. They provide the trusts PAN, registered address, and the trustees contact details. The application is approved within a week. The TAN: TRST45678C is used to file TDS returns quarterly and issue Form 16 to the donor.

Without a TAN, the trust would have been unable to comply with Section 195, risking disallowance of the entire donation as an expense under Section 40(a)(i), which would have increased their tax liability significantly.

FAQs

Is TAN the same as PAN?

No. PAN (Permanent Account Number) is issued to individuals and entities for general tax identification. TAN is specifically for entities responsible for deducting or collecting tax at source. You may need both. For example, a company uses its PAN for income tax filings and its TAN for TDS-related activities.

Can I apply for TAN without a PAN?

No. PAN is mandatory for applying for TAN. The system cross-verifies your PAN before processing the application. If you dont have a PAN, apply for one first through the NSDL or UTIITSL portal.

How long does it take to get a TAN after applying?

Typically, 710 working days from the date of successful submission and payment. If your application is complete and accurate, you may receive it in as little as 35 days. Delays occur only if documents are mismatched or payments are incomplete.

What if I lose my TAN?

You can retrieve your TAN using the TAN verification tool on the Income Tax website by entering your name and PAN. You can also check your email inbox for the original allotment letter. If neither works, you can reapply using Form 49Bbut only if your original application was never approved.

Can one entity have multiple TANs?

No. A single legal entity (company, trust, firm) is allotted only one TAN, regardless of the number of branches or offices. However, if you have multiple legal entities (e.g., two separate companies), each must apply for its own TAN.

Do I need to renew my TAN?

No. TAN is a permanent number and does not expire. Once allotted, it remains valid for the lifetime of the entity. However, you must update your details (address, contact, authorized person) if they change.

Can I apply for TAN if Im not a resident of India?

Yes. Non-residents making payments in India that attract TDS (e.g., paying rent to an Indian landlord or commission to an Indian agent) must obtain a TAN. They can apply using their foreign address and provide their overseas contact details.

What happens if I dont quote TAN on TDS returns?

If you file a TDS return without quoting a valid TAN, the return will be rejected. Even if accepted, the tax paid may not be credited to the deductees account. Penalties under Section 272B (?10,000) may apply for non-obtainment, and Section 271H may impose additional fines for late or incorrect filings.

Can I use the same TAN for TDS and TCS?

Yes. A single TAN can be used for both tax deduction (TDS) and tax collection (TCS). There is no need to apply for separate numbers. Simply indicate both categories when filling Form 49B.

What should I do if my TAN is wrongly allotted to someone else?

If you suspect fraud or misallocation (e.g., your name appears on another entitys TAN), immediately contact the NSDL TIN helpdesk through the official portal. File a complaint with supporting documents. The department will investigate and rectify the error.

Conclusion

Applying for a TAN number is a critical compliance step for any business or entity involved in tax deduction or collection in India. While the process is digital, efficient, and cost-effective, its importance cannot be overstated. A valid TAN ensures smooth tax compliance, avoids financial penalties, enables accurate TDS reporting, and protects your business from legal exposure.

By following the step-by-step guide outlined hereverifying eligibility, gathering accurate data, using the official portal, paying the fee, and verifying your TANyou can secure your TAN without delays. Adopting best practices such as maintaining digital backups, training your team, and integrating TAN into your accounting systems ensures long-term compliance.

Remember, TAN is not a one-time formality. It is an ongoing requirement tied to your tax responsibilities. Whether youre a startup paying freelancers, a corporate paying vendors, or a trust managing donations, your TAN is your key to lawful financial operations in India.

Do not wait for a notice from the tax department to act. Apply for your TAN today. Use the tools, follow the examples, and stay compliant. Your future selfand your businesswill thank you.