What is TAN / PAN (India)?
PAN (Permanent Account Number) is a 10-digit alphanumeric identifier issued by the Income Tax Department to all persons liable to pay tax in India — individuals, companies, and other entities. Every company must have a PAN and quote it on all tax returns, correspondence, and financial transactions above INR 50,000. TAN (Tax Deduction and Collection Account Number) is a separate 10-digit identifier required by any entity that deducts or collects tax at source (TDS/TCS). Both are issued by NSDL/UTIITSL.
Current Rate (FY 2025-26 (AY 2026-27))
N/A — these are identification numbers, not tax rates
Example
A Private Limited company incorporated in January 2026 applies for PAN (Form 49A) within 30 days of incorporation using its Certificate of Incorporation as identity proof. Once it hires employees, it also applies for TAN (Form 49B) to start deducting TDS on salaries.
How TAN / PAN (India) works in India
PAN and TAN are the two fundamental tax identification numbers for Indian companies.
**PAN (Permanent Account Number)**
- Format: 5 letters + 4 digits + 1 check letter (e.g., AAACM1234F). The 4th character indicates the entity type: 'C' for company, 'P' for individual, 'H' for HUF, 'F' for firm. - Application: Form 49A for Indian entities and individuals; Form 49AA for foreign entities - Documents required for company PAN: Certificate of Incorporation, address proof - Mandatory quoting: all ITR filings, TDS returns, financial transactions above INR 50,000, bank account openings, foreign exchange transactions above USD 5,000 - Link PAN with Aadhaar: mandatory for individuals (not companies). Companies do not have Aadhaar.
**TAN (Tax Deduction Account Number)**
- Format: 4 letters + 5 digits + 1 check letter (e.g., MUMB01234A). The first four letters indicate the city/state where TAN is issued. - Application: Form 49B at TIN facilitation centres or NSDL/UTIITSL online - Mandatory for: any entity making TDS-covered payments (salary, rent, professional fees, interest, contractor payments) - One company can have multiple TANs for different branches/locations but must quote the correct one on each return
**Key differences**
| | PAN | TAN | |--|-----|-----| | Purpose | Tax identity | TDS deduction identity | | Applicability | All taxpayers | Only TDS deductors/collectors | | Form | 49A / 49AA | 49B | | Quote on | ITRs, financial transactions | TDS returns, challans, certificates | | Penalty for non-quoting | INR 10,000 | INR 10,000 per instance |
**Quoting PAN on invoices**
Though not legally mandatory on all invoices, clients often require PAN on invoices for GST reconciliation and TDS purposes. Under Section 206AA, if the payee does not furnish PAN, TDS is deducted at 20% (or the applicable rate, whichever is higher) — a significant incentive to always share PAN.
Related terms
TDS is a mechanism under the Income Tax Act 1961 where the payer deducts tax at the time of making certain payments (salary, rent, professional fees, interest, contractor payments) and deposits it with the government on behalf of the payee. The deductor must have a TAN (Tax Deduction and Collection Account Number). TDS rates range from 1% to 30% depending on the payment type.
ITR-6 is the Income Tax Return form applicable to all companies registered under the Companies Act 2013 (and foreign companies) that do not claim exemption under Section 11 (religious/charitable trusts). It must be filed electronically by 31 October of the assessment year (30 November if the company has international/specified domestic transactions subject to transfer pricing audit). The return must be verified using Digital Signature Certificate (DSC) of a director.
ROC compliance refers to the annual and event-based filings required under the Companies Act 2013 with the Ministry of Corporate Affairs (MCA) via the MCA21 portal. Key annual filings include Form MGT-7 (Annual Return, within 60 days of AGM), Form AOC-4 (Financial Statements, within 30 days of AGM), and Form ADT-1 (Auditor Appointment). Non-compliance attracts additional fees and can lead to strike-off of the company.
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