TAN (Tax Deduction and Collection Account Number)
A ten-character number that any person or business responsible for deducting or collecting tax at source must hold, used on every TDS/TCS return and challan.
TAN is a distinct identifier from PAN, required by anyone who deducts TDS or collects TCS, whether that's an employer deducting tax from salaries, a business deducting tax on contractor payments, or a buyer collecting TCS on certain sales. It has to be quoted on TDS/TCS returns, payment challans, and the certificates (like Form 16) issued to the person whose tax was deducted.
A business can hold both a PAN (for its own tax matters) and a TAN (for tax it deducts on behalf of others), and the two serve entirely different purposes. Filing a TDS return or depositing deducted tax without a valid TAN isn't possible, and operating without one despite being liable to deduct TDS attracts a penalty.
This glossary entry is for general informational purposes only and does not constitute professional tax, legal, or financial advice. Rules and rates change, so consult a qualified Chartered Accountant for advice specific to your situation.