PAN and TAN look alike. Both are ten characters, both are issued by the Income Tax Department, and both are processed through Protean. That is where the similarity ends. They do different jobs, and having one does not excuse you from the other.
The question most people actually have is narrower: do I need a TAN for this payment? This guide answers that, explains the PAN-only route for property, rent and similar payments, and covers how to apply, what it costs and what happens if you skip it. If you only need the number, our TAN registration service handles the application.
PAN vs TAN at a glance
| Point | PAN | TAN |
|---|---|---|
| Full form | Permanent Account Number | Tax Deduction and Collection Account Number |
| What it identifies | You as a taxpayer: income, returns, refunds, high-value transactions | You as a deductor or collector of tax at source |
| Who needs it | Anyone with taxable income, a business above the turnover limit, a return to file, or a prescribed transaction | Anyone required to deduct TDS or collect TCS, except the PAN-only cases below |
| Format | Five letters, four digits, one letter (e.g. ABCDE1234F) | Four letters, five digits, one letter (AAAA99999A) |
| Provision, Income-tax Act 2025 | Section 262 | Section 397(1) |
| Provision, Income-tax Act 1961 | Section 139A | Section 203A |
| Application form from 1 April 2026 | PAN application through Protean or UTIITSL | Form 135 (non-government) or Form 134 (government), under Rule 216 of the Income-tax Rules, 2026 |
| Where it is quoted | Returns, bank and property transactions, invoices, TDS statements (as the deductee's identifier) | TDS/TCS challans, quarterly statements and TDS certificates |
| Can one replace the other? | Only where the law allows the PAN-only route | No. Where a TAN is required, quoting a PAN in its place is not accepted |
| Validity | Lifetime | Lifetime; one TAN covers both TDS and TCS |
A business usually needs both. A company gets its PAN and TAN at incorporation through the MCA form, and a firm, LLP or proprietor applies for each separately. See PAN for a company and PAN registration if the PAN side is what is missing.
Who must get a TAN
The rule is short. Section 397(1)(a) of the Income-tax Act, 2025 says every person deducting or collecting tax must apply for a TAN, unless one has already been allotted. The same rule sat in section 203A of the 1961 Act. 'Person' covers individuals, HUFs, firms, LLPs, companies, trusts, societies, AOPs and government offices alike.
In practice you need a TAN if you are:
- An employer deducting tax from salaries, however small the team.
- A business paying contractors, professionals, commission, rent, interest or other amounts above the TDS thresholds, under the general TDS provisions.
- A company, firm or LLP paying a non-resident, whatever the amount of tax involved. Our Form 15CA/15CB page covers payments to non-residents.
- A seller, e-commerce operator or other person required to collect tax at source (TCS).
- A government office deducting TDS on salaries or supplier payments, which applies in Form 134.
Note that the obligation comes from the payment, not the size of the business. A two-person proprietorship that pays monthly salaries above the exemption level needs a TAN just as much as a listed company does.
When your PAN is enough: property, rent and similar payments
Section 397(1)(c) switches off the TAN requirement for a short list of payments. These are the payments that one-off or occasional deductors make, usually individuals, where a TAN and quarterly statements would be out of proportion. As the clause stands from 1 October 2026, no TAN is needed by:
- A property buyer deducting TDS on the price of immovable property other than agricultural land, where the consideration is ₹50 lakh or more. The rate is 1% of the price or the stamp duty value, whichever is higher. This applies to any buyer.
- An individual or HUF paying rent above ₹50,000 for a month or part of a month, who falls outside the general rent TDS provision (broadly, those not subject to tax audit). The rate is 2%.
- An individual or HUF paying a contractor or professional, or paying commission or brokerage, above ₹50 lakh in the year, where they are not covered by the general contractor and professional provisions. The rate is 2%.
- A specified person buying a virtual digital asset (crypto) and deducting TDS on the consideration.
- A resident individual or HUF buying property from a non-resident seller. This exemption was added by the Finance Act, 2026 with effect from 1 October 2026. Before that date, a resident buying from an NRI needed a TAN and the regular non-resident TDS process.
- Any person the Central Government notifies for this purpose.
For each of these payments you deposit the tax and report the deduction together, in one challan-cum-statement, quoting your PAN and the payee's PAN. You then download the TDS certificate from TRACES and give it to the payee.
Form 26QB, 26QC, 26QD and 26QE are now Form 141
Under the 1961 Act, each PAN-only payment had its own form: 26QB for property, 26QC for rent, 26QD for contractor and professional payments by individuals, and 26QE for crypto. The Income-tax Rules, 2026 replace all four with a single form, Form 141, with a separate schedule for each payment.
| Payment | Old form (1961 Act) | From Tax Year 2026-27 (2025 Act) | Threshold and rate |
|---|---|---|---|
| Rent by an individual or HUF | Form 26QC | Form 141, Schedule A | Above ₹50,000 a month; 2% |
| Purchase of immovable property | Form 26QB | Form 141, Schedule B | ₹50 lakh or more; 1% of price or stamp duty value, whichever is higher |
| Contractor or professional payments by an individual or HUF | Form 26QD | Form 141, Schedule C | Above ₹50 lakh in the year; 2% |
| Virtual digital assets | Form 26QE | Form 141, Schedule D | Above ₹50,000 or ₹10,000 in the year, depending on the payer |
| Property bought from a non-resident by a resident individual or HUF | TAN and the regular non-resident TDS statement | Form 141, Schedule E, from 1 October 2026 | As per the non-resident TDS provision |
- Due date: within 30 days from the end of the month in which the tax is deducted.
- Certificate: Form 132, downloaded from TRACES and issued to the payee. For rent, it must be issued within 15 days of the due date for Form 141.
- Which form applies to you: Form 141 covers transactions pertaining to Tax Year 2026-27 onwards, that is, deductions from 1 April 2026. A deduction made before 1 April 2026 sits under the 1961 Act and its old form. If you are correcting or catching up on an older property deduction, use the form for that year.
Schedule E needs more than the domestic schedules. It asks for the non-resident seller's contact details, tax residency certificate number and foreign tax identification number. Collect these before the sale deed, not after. If you want the property deduction handled for you, see our Form 26QB filing service, which covers the Form 141 property schedule for current-year purchases.
How to apply for a TAN
Until 31 March 2026, every TAN application used Form 49B. From 1 April 2026, Form 49B is gone. Applications are made under Rule 216 of the Income-tax Rules, 2026, in one of two forms:
- Form 135 for non-government deductors: individuals, proprietorships, HUFs, firms, LLPs, companies, trusts, AOPs, BOIs, artificial juridical persons and statutory or autonomous bodies, including branches and divisions.
- Form 134 for Central Government, State Government and local authority deductors. It needs the Accounts Office Identification Number (AIN) and a certificate from the pay and accounts office or equivalent.
Step by step, online through Protean
Step 1: Choose the form and category. Select Form 135 or Form 134 and the deductor category on the Protean TAN page.
Step 2: Fill in the details. Name, address, PAN (mandatory for non-government applicants), and the name, PAN, designation and contact number of the person responsible for deducting tax. Form 135 also asks for identifiers such as the CIN or LLP registration number where relevant.
Step 3: Pay the fee. ₹77, which is ₹65 plus 18% GST, by card, net banking, cheque or demand draft.
Step 4: Save the acknowledgement. The portal generates a 14-digit acknowledgement number.
Step 5: Send the signed acknowledgement. Unless you apply through the DSC route, the signed acknowledgement and supporting documents must reach Protean in Pune within 15 days of the online application. For a non-individual, the authorised signatory signs. The application is processed only after the signed acknowledgement is received and the payment is realised.
Step 6: Receive the TAN. Allotment is confirmed by a letter sent to the registered email ID.
Non-government applicants need proof of identity, proof of address and proof of date of birth or date of incorporation. You can also apply offline at an authorised PAN centre, and companies receive their TAN through the MCA incorporation form.
Check every field before final submission. Once submitted, the application cannot be edited. Mistakes are fixed through a correction application after the TAN is allotted, and an incomplete or deficient application may be treated as invalid.
Regikart's fee for preparing and filing a TAN application is ₹499, plus the ₹77 government fee. Once the TAN is in place, our TDS return filing service starts at ₹1,999 per quarter.
Penalty for not getting a TAN, or quoting the wrong one
Under section 468 of the Income-tax Act, 2025, the Assessing Officer may impose a penalty of ₹10,000 on a person who fails to comply with section 397. That covers not applying for a TAN when you are required to, and not quoting it where required. The same section imposes ₹10,000 on a person who quotes a TAN they know or believe to be false.
For defaults up to 31 March 2026, the corresponding penalty was ₹10,000 under section 272BB of the 1961 Act.
The ₹10,000 is rarely the biggest cost. Without a TAN you cannot deposit TDS correctly or file the quarterly statement, so the tax you deducted does not reach the payee's Form 26AS or annual information statement. That brings interest for late payment, fees for late statements, and a deductee who cannot claim their credit. A missing TAN usually shows up first as a complaint from an employee or a vendor.
Where you must quote your TAN
Section 397(1)(b) requires the TAN to be quoted in all challans, statements and certificates relating to TDS and TCS, and in any other documents prescribed. In practice:
- Every TDS and TCS payment challan.
- Every quarterly TDS or TCS statement and every correction statement.
- Every TDS certificate you issue, including the salary certificate (Form 130 under the new rules, earlier Form 16; see our Form 16 guide).
- Correspondence with the department on TDS matters, including responses to TRACES defaults.
Where a TAN is required, the PAN cannot be quoted instead. And a single TAN covers both TDS and TCS, so do not apply for a second one. Separate branches or divisions can hold their own TANs where they deduct separately, but the same office should not.
Common mistakes
- Applying for a TAN just to buy a flat. A resident buyer does not need one. Using a TAN for a property deduction also means the deduction will not sit where the seller expects it.
- Assuming the NRI rule still applies. From 1 October 2026, a resident individual or HUF buying from a non-resident can deduct under their PAN through Form 141, Schedule E. Before that date, a TAN was needed.
- Thinking a PAN covers salary TDS. It does not. An employer needs a TAN however few the employees.
- Using Form 49B after 31 March 2026. Apply in Form 135 or Form 134.
- Using Form 26QB for a 2026-27 purchase. For deductions from 1 April 2026, use Form 141.
- Not sending the signed acknowledgement. An online application that is never followed by the signed acknowledgement within 15 days does not get processed.
- Applying twice. A duplicate TAN causes mismatches in challans and statements. Search for an existing TAN before applying, and surrender any duplicate.
- Quoting the PAN on a challan where a TAN is required. The payment is not matched to a TDS statement and the deductee loses the credit until it is corrected.
Old Act or new Act: which section applies
The Income-tax Act, 2025 has been in force since 1 April 2026. For TDS deducted on or after that date, the TAN rule is section 397, the penalty is section 468 and the PAN-only payments run through Form 141. For anything deducted up to 31 March 2026, the 1961 Act still governs: section 203A, section 272BB and the old 26Q-series forms. Our explainer on the Income-tax Act, 2025 sets out how the wider renumbering works.
Getting it right
Work out first whether the payment needs a TAN at all. If you are an individual buying property, paying rent or paying a large contractor bill, it probably does not, and Form 141 with your PAN is the route. If you are an employer or a business deducting under the general provisions, you need a TAN before your first deposit.
Regikart is a CA and CS firm serving 250+ clients from Kolkata (head office), Delhi and Bengaluru. We check which route applies, file the TAN application or the Form 141 schedule, and handle the quarterly TDS statements that follow. Call or WhatsApp +91 70444 94804, or contact us.
Frequently asked questions
What is the difference between PAN and TAN?
PAN is your identity as a taxpayer, used for returns, refunds and high-value transactions. TAN is your identity as a deductor or collector of tax at source, quoted in TDS and TCS challans, statements and certificates. A business usually needs both, and one cannot be quoted in place of the other where the law requires the TAN.
Do I need a TAN to deduct TDS on a property purchase?
No. A buyer deducting TDS on immovable property of ₹50 lakh or more uses their PAN and files Form 141, Schedule B, for deductions from 1 April 2026. From 1 October 2026, a resident individual or HUF buying from a non-resident seller also uses PAN, through Schedule E.
Do I need a TAN to deduct TDS on rent?
Not if you are an individual or HUF outside the general rent TDS provision paying rent above ₹50,000 a month. You deduct 2% and file Form 141, Schedule A, within 30 days from the end of the month of deduction. A business deducting rent under the general provision needs a TAN.
Which form is used to apply for a TAN now?
From 1 April 2026, Form 135 for non-government deductors and Form 134 for government deductors, under Rule 216 of the Income-tax Rules, 2026. Form 49B was used until 31 March 2026. The government fee is ₹77, which is ₹65 plus GST.
What is the penalty for not obtaining a TAN?
₹10,000 under section 468 of the Income-tax Act, 2025, which applies to failure to comply with section 397 and to quoting a false TAN. For defaults up to 31 March 2026, the penalty was ₹10,000 under section 272BB of the 1961 Act. Interest and late fees on the TDS itself come on top.
Can I quote my PAN instead of a TAN?
Only for the payments where the law provides a PAN-only route: property purchases, rent and large contractor or professional payments by individuals and HUFs outside the general provisions, and certain crypto purchases. Everywhere else a TAN is required, and quoting your PAN instead is not accepted.
Does an employer with one or two employees need a TAN?
Yes, if tax is deductible from their salary. There is no PAN-only route for salary TDS, whatever the size of the employer. The TAN is needed to deposit the tax, file the quarterly statement and issue the salary certificate.
Do I need separate TANs for TDS and TCS?
No. One TAN covers both TDS and TCS. Separate branches or divisions can hold their own TAN where they deduct separately, but the same office should not hold two. A duplicate should be surrendered.
About the author
Regikart Tax & Compliance Desk
Tax & Compliance at Regikart. Want to discuss this in the context of your business?
