The Income Tax Department has released new guidelines outlining the mandatory record retention requirements for TAN (Tax Deduction and Collection Account Number) holders, in a move aimed at improving transparency and facilitating smoother audits. These guidelines apply to all entities—businesses, government departments, NGOs, educational institutions, and co-operative societies—that are responsible for TDS (Tax Deducted at Source) or TCS (Tax Collected at Source) under the Income Tax Act, 1961.

As per the latest directive, TAN holders must retain all tax deduction records, challans, TDS returns (Forms 24Q, 26Q, 27Q, 27EQ), and corresponding Form 16/16A certificates for a minimum of 6 years from the end of the relevant assessment year. This includes correction statements, payment acknowledgements, PAN-TAN mapping logs, digital signature verifications, and communication with the tax department via the TRACES portal. In cases where proceedings such as scrutiny assessments, appeals, or prosecutions are ongoing, the records must be preserved until the final resolution, even if that exceeds the standard period.

The department has emphasized that maintaining organized and retrievable digital copies is acceptable, provided they are securely stored and accessible during audits. TAN holders failing to produce accurate records upon request may face penalties, disallowance of expenses, or enforcement actions under Sections 234E, 271H, and 272BB. To support compliance, the department encourages regular internal audits and the use of certified TDS management software. These guidelines mark a significant step in strengthening fiscal accountability and digital compliance infrastructure for all TAN-linked entities in India.