The Income Tax Department has confirmed the nationwide rollout of TAN-based reporting systems aimed at significantly strengthening tax monitoring and deduction oversight. By leveraging the unique Tax Deduction and Collection Account Number (TAN) assigned to every tax deductor and collector, the government intends to establish a centralized framework that enables real-time tracking of TDS/TCS activities across industries, institutions, and public bodies. This measure is a crucial step toward enhancing the transparency, traceability, and accountability of India’s tax administration.

The new reporting mechanism will require all TAN holders to submit transaction-level details of TDS and TCS, including deductee PANs, challan references, and payment breakdowns. These submissions will be digitally analyzed and cross-verified using AI-powered analytics integrated into platforms such as TRACES and the Central Processing Cell. Authorities believe this system will help identify anomalies such as incorrect deductions, mismatched entries, and underreporting, and will serve as a deterrent against willful non-compliance or evasion.

Tax experts anticipate that TAN-based reporting will lead to tighter enforcement and faster reconciliation, especially for large-scale deductors handling high volumes of transactions. It also opens the door to improved refund processing for compliant taxpayers and easier detection of defaults. Organizations are advised to update their reporting systems, validate employee and vendor PAN data, and ensure strict adherence to the new reporting standards. This initiative marks a turning point in India’s move toward a fully digitized and data-driven tax infrastructure.