A Permanent Account Number or PAN, is a necessary document for tax payers. In India, a PAN Card for company is especially needed to do business. Even foreign companies doing business in India would require a PAN card. It can help the tax department get an overview of the transactions or business done by a foreign company in India and help with the tax returns of the company. Also, under the Finance Act, foreign companies generating or providing income in India have to provide their PAN.
Why is a PAN Card for Company Needed?
Companies need a Tax Registration Number (TRN) when they are getting any payment. A TRN can only be provided to a company when they have a PAN.
The Income Tax Act of 1961 has mentioned all the details related to the issue and requirement of PAN Card for Company.
A PAN Card for Company is essential to protect the tax returns of the company. Since a PAN Card can help the tax department keep a track of the transactions of the company, the income tax department can determine the right tax rates for the company and support it, in case they are eligible for tax benefits. Even foreign companies are required, by law, to apply for business PAN card and get it if they are conducting business in India.
Some of the reasons why a PAN Card is essential to run a company/business:-
The PAN helps the Income Tax Department to track the transactions of a company and help with the tax return filing.
Any company needs to pay tax to the government when they are operating in India. If a company does not have a PAN, the tax department can charge the highest possible tax to that company.
PAN allows transactions to be seamless since it can help get your invoices paid, ensure proper tax returns and remittances.
Every individual and company requires a Tax Registration Number (TRN) and presents it to anyone who is making payments to them. A TRN can be obtained after you get it as fast as possible if you desire .
Under Section 206AA amended in 2009, every foreign company must acquire a PAN card on a compulsory note if they generate or provide payments in India.
If the company does not obtain a PAN Card, it can indicate that the company is withholding taxes and an extra 30% can be charged by the government on the total invoiced payments.
How to Apply for a PAN Card for Company?
The following steps indicate the procedure to apply for a business PAN card online:
Step 1: Visit https://www.onlineservices.nsdl.com/paam/endUserRegisterContact.html to apply for a PAN card. You can opt for Form 49A (Indian) and Form 49AA (foreign) if you want to apply for a PAN card for a partnership firm or a company. After selecting the application type, you need to choose the category, opting for ‘Firm’ (Indian) or ‘Company’ (Foreign) from the drop-down menu options.
Step 2: Fill in personal details such as Name, Title and Date of Incorporation related to the company, and contact details. After entering the captcha, you will receive a token number in your provided email address after which continuing the application will be permitted.
Step 3: For a company, the e-sign and e-KYC options are not available. The application document should be forwarded physically. The company name, contact number and email ID would be pre-filled – only the registration number has to be manually inserted. After submission, you proceed to the Income details.
Step 4: The next step involves putting in the details of the income sources of your company. You have to select the type of business you are in and the source of income, that is if it’s a capital gains, income from house property, income from business or more. You will also have to provide an address for communication whether it is residence or office.
Step 5: You are required to fill in the Assessing Officer (AO) Code. You can go to the AO Code search for PAN to search for the specific code.
Step 6: Upload the required documents and pay the required fee.
Documents Required for Applying for a PAN Card for Indian Company
After completing the application procedures, some documents are needed to apply for a business PAN Card.
The firm PAN card documents that are required are:
A copy of the Certification of Incorporation.
A copy of the No Objection Certificate by the Ministry of Corporate Affairs.
A bank draft should be used to pay for the issuance of a PAN Card. The fee should be paid in INR though if you are a foreign company, you can acquire a foreign currency draft in favour of Protean eGov Technologies Limited.
These are the specific types of required documents based on the type of company:
Types of Organisations
Certificate of Registration ( Provided by Companies Registrar)
LLPs( Limited Liabilities Partnerships)
Registration Certificate (Issued by Registrar of LLPs)
Firms in Partnership
Certificate of Registration (issued by the Registrar of Firms), Partnership Deeds
Number of the Registration Certificate, Trust Deeds
Local Authority/ Association of People/ Artificial Juridical Person/ Group of Individuals
Number of the Registration Certificate (Issued by the charity commissioner/cooperative society registrar/other similar authority) OrAny document received from the Central/State Government which contains the identity and address of a notable.
After receiving these documents, it can take around 15-20 days for the PAN Card to arrive.
Documents Required for Applying for a PAN Card for Foreign Company
Foreign companies can also apply PAN card for partnership firm by providing the following documents:
A copy of the Certificate of Registration is necessary and it should specify the name of the country from which it is issued. It is mandatory to get attested by Apostille/ High Commission/Consulate/Indian Embassy.
If you have questions related to Apostille, it refers to the acceptance and validation of the documents proposed by countries under the Hague Convention 1961. The copies of the documents should be sent to the respective offices when it comes to these countries.
Secretary of the State Office
The Foreign and Commonwealth Office/ The Office for Legalization
A copy of the Copy of Registration Certificate, compulsory to be issued in India so that a business can be properly set by the authorities.
When it comes to an international company, the PAN card is dispatched in around 21 days.
Tips on Applying for PAN Card for Company
Since a PAN Card is a mandatory and sensitive document, it is important to ensure the documents as well as the important information are properly placed in the files. Double checking the information is important. Some other tips that should be followed while putting in the information for the PAN Card for the Company are:
Go through the instructions specified on Form 49 or Form 49AA. Ensure the documents required are scanned properly so that there are no issues when uploading them.
The signature of the CEO or any authorised signatory of the company is compulsory when you have to apply for the PAN Card for partnership firm.
A customer care service should be present within the PAN department for queries or more information.
Payment of fees is different for India and for foreign companies. Read the rules and regulations and follow them.
A PAN Card for Company is essential even if you do not fall under the tax bracket. It is a unique identity of the company and creates a relationship between the company and the government. Since it is a legally-binding on companies to provide tax to the government, a PAN card gives a transparent view of the transactions made by the company, helps the government charge the right percentage of tax to the company and thereby, protects the company’s rights as taxpayers of India. The government can also provide certain tax benefits to companies if there is a transparency of the financial position of the company.
FAQs on PAN Card for Company
Q1. Who must have a PAN Card?
Ans:It is compulsory for the following groups of people to acquire a PAN Card. Taxpayers/ Persons who should return an income/existing assesses must maintain a PAN Card. Any company/business having total sales over Rs. 5 lakhs in the previous year. A person who wants to be a part of a financial transaction where a PAN Number is demanded.
Q2. What other documents are required along with the application form?
Ans:It is important to have the following documents along with the application form. A coloured photograph to place in the application form (Size: 3.5cms* 2.5cms) Any document which marks the identity of the desired address. Code and designation of the AO of the Income Tax Department.
Q3. How do I find the AO’s code?
Ans:You can receive the AO’s code from the Income Tax Office where you usually file your income returns. For those who have never done it, IT PAN Service Centre or the TIN Facilitation Centre will be of great help.
Q5. What documents do I require to generate an E-PAN?
Ans:KYC details and a valid phone number linked to Aadhar are required to generate an E-Pan.
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This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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