How to Apply for TAN Number Online in India (Form 49B)

Every business in India that pays employee salaries, contractor fees, professional charges, or rent above specified limits must have a Tax Deduction and Collection Account Number (TAN) to deduct tax at source and file TDS returns. Applying for TAN online takes under 15 minutes through the Protean (formerly NSDL) portal using Form 49B, costs ₹77 (₹65.50 + 18% GST), and processing takes 3 to 7 working days. This guide walks you through the complete TAN application process for companies, LLPs, partnership firms, and individual business owners in 2026.

What is TAN (Tax Deduction and Collection Account Number)?

TAN (Tax Deduction and Collection Account Number) is a 10-character alphanumeric identifier issued by the Income Tax Department under Section 203A of the Income Tax Act, 1961. It is mandatory for every person or entity responsible for deducting tax at source (TDS) or collecting tax at source (TCS) in India. TAN must be quoted on all TDS/TCS returns, payment challans, and certificates issued to deductees.

The TAN follows the format AAAA99999A, where the first three letters represent the city of the TAN Facilitation Centre, the fourth letter is the first letter of the deductor's name, the next five are numeric digits, and the last character is an alphabetic check digit. For example, DELM12345B indicates a TAN issued from Delhi for an entity whose name starts with "M". TAN is allotted by the Protean e-Gov Technologies Limited (formerly NSDL e-Governance Infrastructure Limited) on behalf of the Income Tax Department.

TAN is different from PAN in both purpose and usage. While PAN identifies a taxpayer, TAN identifies a tax deductor or collector. Every entity that deducts or collects tax at source must have its own TAN, separate from PAN. A single entity needs only one TAN regardless of the number of locations, branches, or divisions from which it operates. Using a single TAN across all branches ensures consolidated TDS reporting and avoids confusion during return filing and Form 16/16A issuance. However, having multiple TANs for the same entity is a violation that attracts the ₹10,000 penalty under Section 272BB.

Who Needs a TAN Number?

TAN is required by any person or entity that has a legal obligation to deduct or collect tax at source. The obligation arises when you make specified payments that exceed the threshold limits defined under the Income Tax Act. Failure to apply for TAN before deducting TDS attracts a penalty of ₹10,000 under Section 272BB. Businesses should apply for TAN at the time of incorporation or commencement of operations, before making any TDS-applicable payment such as salary disbursals, rent payments, or contractor fees.

Entities That Must Apply for TAN

Common TDS-Applicable Payments Requiring TAN

TAN vs PAN: Understanding the Difference

Business owners frequently confuse TAN with PAN since both are 10-character identifiers issued by the Income Tax Department. They serve entirely different purposes in the tax system.

Documents Required for TAN Application

The TAN application process through the Protean portal requires minimal documentation. For fully online applications (with OTP or DSC verification), no physical documents need to be uploaded or mailed. The entire process is digital, and the portal verifies your entity details against PAN records in real time. Physical submission mode is available as an alternative but adds 10 to 15 days to processing time and requires mailing signed documents.

For Online Application (No Physical Documents Needed)

1. PAN of the entity (company PAN, LLP PAN, firm PAN, or individual PAN for sole proprietors)
2. Registered office address as per the incorporation certificate or business registration
3. Name and designation of the responsible person (director, partner, proprietor, or Karta)
4. Active email address for receiving the TAN allotment letter
5. Active mobile number for OTP verification during the online process

For Physical Submission Mode (Additional Requirements)

1. Printed and signed acknowledgement receipt from the online application
2. Two passport-size colour photographs of the authorised signatory
3. Copy of the Certificate of Incorporation (for companies) or Certificate of Registration (for LLPs)
4. Copy of the PAN card of the entity
5. Proof of address of the registered office

Step-by-Step: Apply for TAN Online Using Form 49B

The complete TAN application process takes 10 to 15 minutes online. Follow these steps to apply through the Protean portal. Form 49B is the prescribed application form for new TAN allotment under Rule 114A of the Income Tax Rules. The form collects the deductor's identity, address, responsible person details, and the nature of TDS/TCS payments the entity will make. Keep your PAN card, incorporation certificate, and authorised signatory details ready before starting the application.

Step 1: Visit the Protean (NSDL) TAN Application Portal

Open your browser and navigate to the official Protean portal at tin-nsdl.com. On the homepage, go to Services > TAN > Apply Online (New TAN). You will be redirected to the Form 49B online application page. Do not use any third-party websites for TAN application, as the official process is available directly on the government-authorised Protean portal at no additional cost beyond the standard ₹77 fee.

Step 2: Select Category of Deductor

Select the appropriate deductor category from the dropdown menu. The categories are:

• Company: For Private Limited Companies, Public Limited Companies, OPCs, and Section 8 Companies
• Firm/Association of Persons/Body of Individuals: For LLPs, partnership firms, and AOPs
• Individual/HUF: For sole proprietors and Hindu Undivided Families
• Trust: For trusts, societies, and Section 25/8 companies registered as non-profits
• Government: For central, state, and local government entities

Step 3: Fill Form 49B Details

Complete the Form 49B fields in the following order:

1. Name of the Deductor: Enter the full legal name of the entity as per PAN records (e.g., "ABC Technologies Private Limited")
2. PAN of the Deductor: Enter the 10-character PAN of the entity (company PAN for Pvt Ltd, LLP PAN for LLPs, personal PAN for sole proprietors)
3. Address: Enter the registered office address including building/flat number, road/street, area/locality, city/town, state, and PIN code
4. Responsible Person Details: Enter the name, designation (Director, Designated Partner, Proprietor), PAN, and contact details of the person responsible for TDS compliance
5. Contact Information: Provide active email and mobile number for the entity
6. Source of Income: Indicate the applicable sections under which TDS will be deducted (e.g., 192 for salary, 194C for contractors)

Step 4: Preview and Verify Application Details

Before submission, the portal displays a preview of all entered information. Verify every field carefully. Pay attention to the entity name spelling (must match PAN exactly), the address (must match the registered office), and the responsible person details. Errors in the application can be corrected later, but each correction costs an additional ₹77 and takes processing time.

Step 5: Choose Submission Mode and Authenticate

Select the submission mode:

• Online (Recommended): Authenticate using OTP sent to the registered mobile number or digitally sign with a Class 3 DSC. No physical documents need to be mailed. Processing is faster (3 to 7 working days).
• Physical: Print the acknowledgement, sign it, attach photographs and documents, and mail to the Protean processing centre within 15 days. Processing takes 15 to 20 working days after receipt.

Step 6: Pay ₹77 Application Fee

Complete the payment of ₹77 (₹65.50 + 18% GST) through any of these methods: net banking, debit card, credit card, or UPI. Upon successful payment, the portal generates a 14-digit Token Number on the acknowledgement receipt. Save this number, as it is required to track your application status and for any future communication with Protean regarding this application. The acknowledgement is also emailed to the registered email address. Keep the payment receipt for your records as the ₹77 is a deductible business expense.

Step 7: Track Application Status

After submission, track your application at any time by visiting tin-nsdl.com > Services > TAN > Know Status of Your Application. Enter your 14-digit Token Number and the captcha code. The portal shows the current processing stage: Submitted, Under Processing, Allotted, or Returned (with reasons). Once allotted, the TAN number is displayed on the status page, emailed to the registered email, and mailed as a physical allotment letter to the registered address.

If the status shows "Returned", the application has been rejected. Common rejection reasons include PAN-name mismatch, incomplete fields, or selecting the wrong deductor category. In such cases, you do not need to pay again -- re-submit the corrected application using the same Token Number within 45 days of the return date. If the 45-day window lapses, you must file a fresh application with a new ₹77 payment. For online submissions with correct details, most applications are processed within 3 to 5 working days. Physical submissions take 15 to 20 working days from the date Protean receives the signed acknowledgement and documents.

TAN Application Fee Breakdown

The ₹77 fee is per application. If you need to correct errors after TAN allotment, the correction request also costs ₹77. There is no annual maintenance or renewal fee for TAN. Once allotted, TAN is valid permanently unless surrendered. The fee has remained unchanged since 2020 and applies uniformly to all entity types. Payment confirmation is instant for net banking and UPI transactions. For debit/credit card payments, allow up to 15 minutes for the payment gateway to confirm. If the payment fails but the amount is debited, submit a grievance on the Protean portal with your bank transaction reference number for a refund within 7 to 10 working days.

TAN Application for Different Entity Types

The Form 49B fields vary slightly depending on the type of entity applying. Here is entity-specific guidance.

Private Limited Company

Select "Company" as the deductor category. Enter the company name exactly as it appears on the Certificate of Incorporation (including "Private Limited" at the end). Use the company PAN (4th character is "C"). The responsible person is typically the managing director or any whole-time director. PAN is now auto-allotted via SPICe+ during incorporation, but TAN must be applied for separately using Form 49B.

Limited Liability Partnership (LLP)

Select "Firm/Association of Persons/Body of Individuals" (not "Company"). Enter the LLP name as per the Certificate of Registration. Use the LLP PAN (4th character is "F"). The responsible person should be one of the designated partners. The LLP Agreement or Certificate of Registration is needed only for physical submission mode.

Partnership Firm

Select "Firm/AOP/BOI" as the category. Enter the firm name as per the Partnership Deed. If the firm has a separate PAN, use the firm PAN (4th character is "F"). If the firm does not have a PAN, the managing partner's PAN is used. The responsible person is the managing partner named in the deed.

Sole Proprietor

Select "Individual/HUF" as the category. Enter the proprietor's name as per their PAN card. Use the proprietor's personal PAN (4th character is "P"). The registered business address is typically the business premises or the proprietor's residential address used for business. The sole proprietor is both the applicant and the responsible person. Many sole proprietors assume TAN is required only for companies, but any sole proprietor paying rent above ₹50,000 per month, contractor fees exceeding ₹30,000 per transaction, or professional fees above ₹30,000 must deduct TDS and therefore needs a TAN. Even freelancers hiring sub-contractors should apply for TAN if their payments cross the applicable threshold in any financial year.

After Receiving TAN: Essential Next Steps

Once your TAN is allotted, complete these compliance steps to set up your TDS infrastructure properly. TAN allotment alone does not complete your TDS compliance obligations. You must register on multiple government portals, configure your accounting software for TDS calculations, and begin deducting tax from the very first applicable payment. The table below lists the essential setup actions in priority order.

TDS Return Filing Calendar

After obtaining TAN, you must file quarterly TDS returns by these due dates. Late filing attracts a fee of ₹200 per day under Section 234E, capped at the total TDS amount for that quarter. The return must be filed for every quarter in which TDS was deducted, even if the deducted amount was deposited to the government on time. The filing is done online through the Income Tax e-filing portal or through authorised TDS return preparers (TRPs) using compatible software such as Saral TDS, Cost TDS, or GenTDS provided by Protean.

TDS Return Forms

• Form 24Q: Quarterly statement of TDS on salary payments (Section 192)
• Form 26Q: Quarterly statement of TDS on non-salary payments to residents (Sections 194A, 194C, 194H, 194I, 194J, etc.)
• Form 27Q: Quarterly statement of TDS on payments to non-residents (Sections 195, 196A, 196B, etc.)
• Form 27EQ: Quarterly statement of Tax Collected at Source (Section 206C)

Setting Up TRACES Portal After TAN Allotment

The TDS Reconciliation Analysis and Correction Enabling System (TRACES) at tdscpc.gov.in is the central government portal for managing all TDS-related activities after TAN allotment. Every entity with a TAN must register on TRACES to file TDS returns, download Form 16/16A TDS certificates, view processed TDS statements, and respond to any default notices issued by the Income Tax Department.

To register as a deductor on TRACES, visit tdscpc.gov.in and click "Register as New User" > "Deductor". Enter your 10-character TAN and select the verification method. For first-time registration, the portal verifies your identity using the challan details of any TDS payment already deposited through your TAN. If you have not deposited any challan yet, you can use the token number from any filed TDS return for verification. Complete the activation by setting a password and verifying the registered email and mobile number.

After registration, the TRACES dashboard provides access to several critical functions: Statement Status (view filed TDS returns and their processing status), Default Summary (view short deduction notices, late filing penalties, and interest demands), Justification Report (download detailed reports for any defaults raised against your TAN), and Form 16/16A (download bulk TDS certificates for employees and deductees). The portal also provides a facility to file online correction statements if your original TDS return had errors in PAN, amount, or section details.

Businesses that handle TRACES registration within the first week of TAN allotment are better positioned to respond to early compliance requirements. The portal sends email alerts for upcoming filing deadlines, processed statement notifications, and default intimations. Configure the notification preferences in the portal settings to receive these alerts on multiple email addresses within your finance team.

TAN Requirements for Non-Resident Payments (Section 195)

If your business makes payments to non-residents or foreign companies, TDS under Section 195 applies, and your TAN is required for depositing the tax and filing Form 27Q. The TDS rate on non-resident payments varies based on the nature of payment and the applicable Double Taxation Avoidance Agreement (DTAA) between India and the recipient's country of residence.

Common non-resident payments requiring TDS include: software licence fees paid to foreign vendors (royalty under Section 195, typically 10% under most DTAAs), professional or consulting fees paid to foreign consultants (Fees for Technical Services, 10% to 15% depending on DTAA), interest on ECB (External Commercial Borrowings) paid to foreign lenders (20% without DTAA, reduced rates with DTAA), and dividends paid to foreign shareholders (20% without DTAA).

For non-resident payments, TDS must be deducted at the time of credit to the payee's account or at the time of payment, whichever is earlier. The deducted TDS is deposited using Challan 281 with the correct section code and nature of payment. The quarterly return for non-resident TDS is Form 27Q, filed separately from Form 26Q (which covers resident non-salary payments). If the non-resident provides a Tax Residency Certificate (TRC) and Form 10F, you can apply the lower DTAA rate instead of the domestic rate. Without these documents, the higher domestic rate applies.

Common Mistakes During TAN Application and How to Avoid Them

Selecting Wrong Deductor Category

LLPs commonly select "Company" instead of "Firm/AOP/BOI", causing PAN validation failure. Partnership firms without a separate PAN mistakenly enter the partner's PAN under the "Company" category. Always match the deductor category to your PAN type: C for companies, F for firms and LLPs, P for individuals.

Name Mismatch with PAN Records

The deductor name must match the PAN records exactly, including the entity suffix. "ABC Technologies Pvt Ltd" will be rejected if the PAN records show "ABC Technologies Private Limited". Copy the name from your PAN card or e-PAN to avoid this issue.

Applying for Duplicate TAN

Before applying for a new TAN, verify that your entity does not already have one. Use the "Know Your TAN" search on the Protean portal or check Forms 16/16A issued previously. Having multiple TANs for the same entity attracts a penalty of ₹10,000 under Section 272BB. If you discover duplicate TANs, file a correction request to surrender the extra TAN.

Delaying TAN Application After Incorporation

New companies often wait months after incorporation to apply for TAN, by which time they have already made TDS-applicable payments without deducting tax. This creates liability for both the TDS amount and interest at 1% per month (for non-deduction) or 1.5% per month (for non-deposit after deduction). Apply for TAN within the first week of commencing business operations.

TAN Correction and Update Process

If you need to correct or update details in your TAN records after allotment, file a TAN Change/Correction Request online. Corrections are necessary when any information (name, address, category, or responsible person) changes after TAN allotment. Unlike TAN application, which can be done only once per entity, TAN correction requests can be filed multiple times at any point.

Types of Corrections Allowed

The TAN correction facility covers all fields that were part of the original Form 49B application. The most common corrections and when they arise include:

• Name correction: Required when the company name changes after a board resolution and ROC approval, or when the original application had a spelling error
• Address update: Required after shifting the registered office, changing state jurisdiction, or correcting the PIN code or city name
• Category change: Rarely needed, but required when a partnership firm converts to an LLP or a proprietorship incorporates as a Pvt Ltd company (though fresh TAN is usually recommended for entity conversions)
• Responsible person update: Required when the director, partner, or officer responsible for TDS compliance changes due to resignation, appointment, or internal restructuring

Correction Process Steps

1. Visit tin-nsdl.com and go to Services > TAN > Change/Correction
2. Enter your existing 10-character TAN
3. Select the fields you want to update (name, address, category, responsible person details)
4. Enter the corrected information and verify with the preview
5. Pay ₹77 (same as a new application)
6. Submit online (OTP/DSC) or mail the signed acknowledgement to Protean

Common corrections include updating the registered office address after relocation, changing the responsible person when a director or partner changes, and correcting name spelling errors that occurred during the original application. Processing time for corrections is 3 to 7 working days for online submissions. You can track the correction status using the same 14-digit Token Number generated during submission.

TAN Penalties and Non-Compliance Consequences

Understanding the penalty structure is important for businesses applying for TAN and setting up TDS compliance. The Income Tax Act imposes penalties at multiple stages of non-compliance.

The interest on non-deduction (1% per month) and late deposit (1.5% per month) applies for every month or part of the month, meaning even a 1-day delay into a new month counts as a full month for interest calculation. For growing businesses making significant contractor and rent payments, these interest charges can accumulate rapidly. Setting up automated TDS calculation in your accounting software and configuring challan payment reminders for the 7th of each month helps avoid these costs entirely.

Related Resources

• Income Tax Return Filing Service -- professional ITR filing with TDS reconciliation and compliance support
• TDS Rate Calculator -- calculate applicable TDS rates and amounts for different payment categories
• GST Registration -- register for GSTIN alongside TAN to set up complete tax compliance for your business
• TDS Registration and TAN Guide -- detailed guide on TDS compliance setup after obtaining TAN
• Income Tax e-Filing Portal Registration Guide -- set up your entity profile on the Income Tax portal using PAN and TAN

Summary

Applying for TAN is a mandatory compliance step for any business that deducts or collects tax at source. The process takes 10 to 15 minutes on the Protean portal using Form 49B, costs ₹77, and delivers the TAN allotment within 3 to 7 working days for online submissions. Apply before making your first TDS-applicable payment to avoid the ₹10,000 penalty under Section 272BB. After receiving TAN, register on TRACES, set up your TDS accounting system, and begin filing quarterly returns.