How to Surrender a TAN: Process, Documents and Indemnity Bond Format

How to Surrender a TAN: Process, Documents and Indemnity Bond Format

Many organisations hold TANs they no longer use: branch TANs left over after TDS was centralised at head office, TANs of a company that merged into another, or a second TAN allotted to the same deductor by mistake. An unused TAN does not close on its own. As long as it is active, the Department can still raise a default, notice or demand against it, and someone in your team has to answer it.

Surrendering the TAN closes it formally. This guide explains the process, the documents you need, a draft application you can adapt, and what the closure letter looks like.

Why surrender an unused TAN?

• No future notices on a dead TAN. Once closed, the TAN cannot attract new defaults for periods after closure.
• Cleaner compliance records. Auditors, due-diligence teams and acquirers see only the TANs actually in use.
• Fewer errors. Vendors and banks stop quoting an old TAN in challans and TDS certificates, so credits land correctly in deductees' Form 26AS/AIS.

Common reasons for surrender

TAN surrender process at a glance

Step-by-step: how to surrender a TAN

Phase 1: Prepare

Phase 2: Verify

Phase 3: Apply

Phase 4: Close

Documents checklist for TAN surrender

TAN surrender letter format

(On the entity's letterhead)

Date: [DD.MM.YYYY]

To, The Assessing Officer Income Tax Department (TDS Cell) [Circle/Ward], [Office address] [City – PIN]

Subject: Request for surrender of TANs

Respected Sir/Madam,

[Entity Name], [constitution, e.g., a company incorporated under the Companies Act, 2013], submits this application for the surrender of the Tax Deduction and Collection Account Numbers (TANs) listed in Annexure-A enclosed.

These TANs were allotted to various branches/offices of [Entity Name] for TDS/TCS compliance. Consequent upon [reason, e.g., centralisation of TDS/TCS compliance from Financial Year [YYYY-YY] / amalgamation of [Transferor Entity] with [Entity Name] / closure of the branch], the TANs are no longer in operational use and are not being used for filing TDS/TCS statements or reporting any tax transactions.

[Entity Name] has verified the records on the TRACES portal and its internal records, and confirms that these TANs have no pending TDS/TCS statements, defaults, outstanding demands, interest, fee, penalty or other liability.

We therefore request you to surrender the TANs specified in Annexure-A and issue the closure letter.

Enclosures:

• Indemnity bond executed by [Entity Name]
• Annexure-A: list of TANs proposed for surrender

We shall be glad to provide any further clarification or documents required.

Thanking you, For [Entity Name] [Authorised Signatory – Name, Designation]

What goes into the indemnity bond

The indemnity bond is executed on non-judicial stamp paper in favour of the AO (TDS). It usually contains:

• Recitals: that the entity holds the TANs in Annexure-A, has stopped using them for the stated reason, and has verified on TRACES that no statements are pending and no default, demand, interest, fee or penalty is outstanding.
• Declaration: that the TANs are no longer in operational use.
• Cooperation: an undertaking to furnish any documents or clarifications the Department needs.
• Indemnity: an undertaking to bear any demand, interest or penalty that arises later for the period when the TANs were operational.
• Non-admission clause: that nothing in the bond is an admission of any existing default or liability.
• Validity: binding on the entity and its successors until all matters for the pre-surrender period are concluded.

Keep the wording non-admitting. The bond confirms your verification; it should not read as an admission that a default exists.

Annexure-A format

What the TAN closure letter looks like

The AO issues one letter for each TAN, each with its own ITBA reference number. The format is:

Check three things on each letter: the TAN, the closure date and the reason. If you surrendered five TANs, you should receive five letters.

Precautions before and after closure

• Clear all TRACES defaults first. The AO may refuse or delay closure if any demand is open.
• File pending correction statements before you apply. A closed TAN cannot be used to file statements.
• Download TDS/TCS certificates (Form 16/16A/27D, or their equivalents under the Income-tax Act, 2025 [VERIFY form numbers]) already issued under the TAN.
• Tell deductees, vendors and banks which TAN to use going forward, so credits show correctly in their 26AS/AIS.
• Keep the file: closure letter, application, indemnity bond and TRACES proofs, for at least the statutory record-retention period.
• Remember the indemnity: a demand raised later on a closed TAN for its operational period remains the entity's liability.

Track old-TAN notices before and after surrender

The most common reason a surrender stalls is an open default nobody was tracking. TaxCPC, Figment's TDS return filing software, validates statements against TRACES so defaults are caught before they become demands. NoticeCPC, Figment's tax notice management software, brings TDS, Income Tax and GST notices across all your TANs and PANs into one dashboard, so a notice on a closed branch TAN is not missed.