Basically, entrepreneurs who start their new business have to apply for TAN. To know why you require this Tax Deduction Account Number, let us understand the meaning of this three letter words.

1. TAN stands for Tax Deduction Account Number or Tax Collection Account Number and is a 10-digit alpha numeric number issued by the IT department.

2. Every person liable to deduct tax at source or collect tax at source is required to obtain TAN except in case of transfer of certain immovable property where one can quote PAN.

3. TAN is mandatory for filing tax deducted at source returns and tax collected at source returns, challans and certificates whether filed in paper or electronic format

4. A single TAN suffices for all types of deduction and collection be it property, interest, salary etc.

5. Just as in case of a PAN, it is illegal to hold more than one TAN