In a progressive move to encourage compliance and simplify procedures for new businesses, the Income Tax Department has introduced automated TAN (Tax Deduction and Collection Account Number) allotment for startups during company registration. This streamlined process is integrated with the MCA (Ministry of Corporate Affairs) SPICe+ portal, enabling eligible entities to receive their TAN instantly upon incorporation, without the need for a separate application or manual follow-up.

Under the new mechanism, when a startup files for incorporation using the SPICe+ form, the system will simultaneously generate the Permanent Account Number (PAN) and TAN through automated backend processes. This initiative eliminates paperwork and reduces processing time from several days to just a few hours. The move is expected to boost early-stage compliance, allowing startups to immediately fulfill statutory obligations such as TDS deductions on salary, rent, or contractual payments from day one of operations.

The government’s decision is part of its larger agenda to promote ease of doing business in India, especially for small and innovative enterprises. Startups no longer need to separately visit the NSDL e-Gov portal for TAN allotment, and all relevant details are communicated via digital channels for quick reference and record-keeping. Chartered accountants and company secretaries have welcomed the reform, citing that early and automatic TAN allotment will improve financial discipline and reduce the risk of non-compliance in the crucial initial months of business setup.