TAN is a 10 digit number issues to an individual / an organisation who suppose to deduct the tax from the payment they make to an individual / an organisation. The TAN registration falls under the Indian income tax act 1961 and the full form of TAN is Tax Deduction or Collection account number or TAX collection account number. Section 203 A of income tax act 1961 mandates that all the corporates / entities mention their TAN number in each and every TDS returns, TDS certificates, and TDS payment challan. 

• TAN is used to deduct the tax from all the income such as Salary, Incentive, and deposit the same on the name of the individual as their tax payment to Govt of India. The tax challan 281 is used while submitting the returns.  The10 digit TAN number must mentioned correctly on every return filed.
• TDS certificates are issued to an individual whose tax is deducted and deposited with the help of TAN number. An individual can easily check how much tax is deposited on his name by an entity who deducted his tax.
• TAN number must be mentioned on the tax certificates (form 16) to an employee, or a vendor who gave services and his tax deducted against the payment made.