TAN is Tax Deduction and Collection Account Number. TAN is to be obtained by all persons who are responsible for deducting tax at source (TDS) or who are required to collect tax at source (TCS). It is a 10-digit alphanumeric number issued by the Income-tax Department.

TAN requires to all those persons who deduct or collect tax at source. It is mandatory to quote TAN in TDS/TCS return (including any e-TDS/TCS return), any TDS/TCS payment challan and TDS/TCS certificates including all Annual Information Returns. Failure to apply for TAN or comply with any of the other provisions attracts a penalty of Rs. 10,000/-.

Advantages:

1. TAN is used for deductions like salary, interest, dividend, etc.
2. It can be used for returns, challans and certificates.
3. It auto-captures complete address of the person who deducts tax on behalf of the IT department. It also captures the Postal Index Number recorded with Income Tax Department.
4. If a person has more than one TAN, it is illegal. But different branches or divisions of a collector can apply for separate TAN for each branch or division.
5. CIT Address captured automatically.
6. Status of Booking captured whether matched or not matched.