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PTAN is a 10 digit alpha numeric number issued by Income Tax Department to PAN holders who are required to deduct or collect tax at source as per Income Tax provisions.
As per Income Tax Provisions it is mandatory to deduct tax while making certain payments like Rent, Professional Fees, Contractors payment etc by certain class of assessees. It is also mandatory to collect tax at source on certain transactions. For making such collection and deductions, it is important to have TAN from the IT department.
TAN helps to make payment of deducted or collected Tax to government. It also helps to file periodical TDS/TCS returns of such payments and issue TDS/TCS certificates.