Explanation
TAN (Tax Account Number) is issued under Section 203A of the IT Act 1961 (IT Act 2025). It is mandatory for: businesses and individuals who deduct TDS on salary, contractor payments, rent, professional fees, etc., or who collect TCS. Format: DDDA00000A (4 letters, 5 digits, 1 letter). Obtained online from NSDL/TRACES. Without TAN, TDS challans cannot be deposited and TDS returns cannot be filed. Penalties for not having TAN: ₹10,000 under Section 272BB. Note: for property purchases (Section 194IA/Code 1029-1030), the buyer can use their PAN (from 1 October 2026 as an alternative) instead of TAN. Verify on TRACES before filing.