Deduction of Tax at Source (TDS): If a business or entity makes payments like salaries, professional fees, rent, etc., it is required to deduct tax at source and remit it to the Income Tax Department. To do so, the business needs a TAN.

Collection of Tax at Source (TCS): Certain entities are required to collect tax at source, such as on the sale of specific goods like liquor, scrap, etc.

TDS/TCS Filing: TAN is necessary for filing TDS returns and TCS returns with the Income Tax Department.

Issuing TDS/TCS Certificates: It is used to issue Form 16 or Form 27D to employees or other parties from whom TDS/TCS has been deducted.