Quick answer: A TAN number is the ten-character Tax Deduction Account Number that anyone deducting or collecting tax at source in India must hold. Section 397 of the Income-tax Act, 2025 (formerly section 203A) requires you to quote it on every TDS challan, statement and certificate. Employers need one before the first salary payment that attracts TDS.
- The format is four letters, five digits and one letter.
- Non-government applicants now use Form 135, and government deductors Form 134. Both replaced Form 49B.
- The fee is ₹77 including GST, paid online through Protean or the MCA portal, or at a PAN centre.
- A TAN is separate from your PAN, and you need both.
How is a TAN different from a PAN?
A PAN identifies you as a taxpayer. A TAN identifies you as a deductor.
| Point | PAN | TAN |
|---|---|---|
| What it identifies | Anyone who pays tax | Anyone who deducts or collects tax |
| Section, 2025 Act | 262 (formerly 139A) | 397 (formerly 203A) |
| Format | 5 letters, 4 digits, 1 letter | 4 letters, 5 digits, 1 letter |
| Application form | Forms 93, 94, 95 | Forms 134, 135 |
| Quoted on | Returns and tax payments | TDS challans, statements, certificates |
In a TAN, the first three letters are a jurisdiction code and the fourth is the initial of the holder’s name. The Income Tax Department’s TAN page explains the format.
A company applying for a TAN must quote its PAN. So the PAN comes first.
Who needs a TAN under the 2025 Act?
Every person who deducts or collects tax at source, with narrow exceptions. That includes any employer running TDS on salary, a firm paying contractors, and a company remitting fees abroad.
The exceptions are narrow. From 1 October 2026, resident individuals buying property from a non-resident no longer need a TAN for that deduction, following Finance Act 2026.
A wrong TAN is a quiet problem. If the TAN on a challan doesn’t match the TAN on your quarterly Form 24Q, now Form 138, the deposit sits unmatched and employees lose their tax credit until you correct it.
Under the 1961 Act, failing to obtain or quote a TAN carried a ₹10,000 penalty.
Do you need your own TAN if you hire through an EOR?
No. The employer of record is the deductor, so it uses its own TAN for your employees’ salaries.
You need a TAN only when your own entity starts deducting tax. That happens when you form a wholly owned subsidiary and put staff on its payroll. Our guide to payroll compliance in India shows what the TAN then unlocks.
How does Remunance use its TAN for your India payroll?
Remunance deducts, deposits and reports your team’s TDS under the TAN of Remunance Services Pvt Ltd, so your company never registers as a deductor in India. If you later set up your own entity, our India subsidiary formation team applies for its PAN and TAN and moves your EOR staff across. That transfer is part of the same service. To map the switch from EOR to your own TAN, talk to our entity set-up team.
What else do people ask about TAN numbers?
Is TAN mandatory for salary payments?
Yes, once any employee’s salary attracts TDS. Apply within the prescribed time and quote the TAN on every deposit and return.
How long does TAN registration take?
It is usually quick once Form 135 is filed online with the right documents, but timing depends on the processing agency. Apply as soon as your entity has its PAN.
Can one company have more than one TAN?
Yes. Separate branches or divisions can each hold their own TAN, since Form 135 allows applications from branches and divisions.