The Income Tax Department, in coordination with the Ministry of Finance, has announced that quoting a valid TAN (Tax Dedication and Collection Account Number) will now be mandatory for all institutions and organizations receiving government grants, subsidies, or project-based financial assistance. This move is intended to ensure tax deduction compliance and strengthen the audit trail associated with the utilization of public funds, especially in sectors such as education, healthcare, research, rural development, and public infrastructure.

Under the revised policy, any organization receiving grants from central or state governments must first obtain a valid TAN and ensure that it is quoted in all financial statements, grant utilization reports, and related tax filings. The mandate applies to NGOs, universities, charitable trusts, cooperatives, and private contractors that issue or receive payments subject to TDS under Sections 194C, 194J, 194I, and related provisions. Failure to comply with this requirement may result in delays in disbursal, suspension of grants, or disallowance of expenditure claims during statutory audits.

To assist with compliance, the department is urging all prospective grant recipients to verify their TAN status through the NSDL e-Gov portal, initiate correction if needed, and register on the TRACES portal for managing TDS filings. This reform is part of a larger effort to promote fiscal transparency and accountability in the deployment of government funds, while aligning tax compliance frameworks with India’s expanding digital governance infrastructure.