A permanent account number known as PAN is a vital document for any taxpayer. It is a 10-character number consisting of letter and digits. PAN card requirements are detailed in the Income Tax Act of 1961. This number is unique to each cardholder and helps identify the income tax payer. It is required for individuals, partnerships, companies. It also serves as an identity proof from a number of purposes.
Does your company need a PAN card?
Any corporate body doing business in India requires a PAN card whether it is registered in India or abroad. Any individual or entity involved in business with an Indian firm requires a PAN card. It is also required for anybody who is involved in generating money out of India whether the company is registered, or has a permanent establishment, or an office in India. Given below is a list of bodies that require PAN cards in India.
- Sole proprietorship
- Limited companies
- Private firms
- Foreign institutional investors
- Hedge funds
Why does your company need a PAN card?
Some of the reasons why getting a PAN Card is important are listed below.
- It was made mandatory by the Government of India under the Income Tax Act, 1961 in recent years and came into effect in April 2010. The Act was amended and Section 206AA was inserted in 2009 by the Finance Act. Under this amendment, all foreign parties that provide or generate payment to a counterpart in India will have to provide their PAN. This includes not only individuals but also incorporations, companies, limited companies or any other form of entities.
- In the absence of the PAN, the government will charge withholding tax which can be at the rate of more than 30% of the total invoiced payment.
- It serves as a reference number for the Income Tax Department to track your financial transactions. You will be required to quote your PAN on your transactions and your income tax document.
- Even if you are not eligible to pay taxes, it is mandatory to have one if you are earning money.
- Companies, regardless of whether they are registered abroad or in India, are required to pay tax for businesses carried out in the country. Without the PAN, the government will deduct tax at the highest possible rate.
- Your PAN will help you get invoices paid, remittances, and during income tax returns.
- Just like individuals, companies are required to provide their Tax Registration Number (TRN) to whomever is paying them. A TRN can be obtained only when the company has a PAN.
How to get a PAN card for a company?
- Download the application form 49A from the internet on any of the reliable PAN Websites.
- Read the instructions for filling the form carefully. All details of the process will be mentioned on the form.
- Fill in the application and provide all the required information.
- You need to acquire a bank draft for the payment of the PAN Card fees. Bank charges for the draft will have to be borne by the applicant.
- Enter the details of bank draft which includes issuing bank, date of issue, and the demand draft number.
- The name and details of the Assessing Officer can be left blank.
- Once you have filled out the form, you can download and print the form.
- Sign the form and send it along with supporting documents to the PAN agent or broker you have selected.
- The supporting documents need to be apostilled.
- You can also send it directly to NSDL or any NSDL processing centers in India.
- Note down the PAN card application number which will help you track the status of your application.
- The government will then issue your firm a PAN number and the card will be dispatched to your registered address.
- It can take around 5 weeks to receive your PAN card.
Documents Required for PAN Card for Company
You require the following supporting documents.
- Submit any one of the following as ID proof:
- An apostilled copy of the Certificate of Incorporation.
- An apostilled copy of the Business Registration Certificate
- An apostilled copy of the Articles of incorporation.
- Submit the following as Address proof:
- An apostilled copy of the company bank statement bearing the company name and full current address for communication. The PAN card will be delivered to this address.
- You require a bank draft which is used to pay the Income Tax Department the fee for the issuance of the PAN card. Currently the fee is around Rs. 1,000. The fee needs to be paid in INR (Indian Rupees). For this reason, you can acquire a foreign currency draft drawn in favor of NSDL - PAN or UTITSL. This draft will be payable in Mumbai.
In case you do not have the required documents listed above, you can obtain the same in the country your company was initially registered or incorporated by contacting the concerned authority.
How to get Apostilles for the documents?
An apostille validates documents and is accepted in any country that participated in the 1961 Hague Convention Abolishing the Requirement of Legalization for Foreign Public Documents. If your country has participated in this treaty and has signed this pact, no authorization will be needed as India is also a party to this convention.
For apostille, the copies of your documents can be sent to the following offices:
|UK||The Legalization Office|
|The Foreign and Commonwealth office|
|USA||Secretary of State Office|
For other countries, you will need to contact your broker or agent for more information on the process.
Tips on PAN Card for Companies
- Reading the instructions on the form is very important.
- The form should be filled in block letters with a black pen.
- The form should be signed by the CEO only, or the authorized signatory of the firm.
- The PAN Department has a customer care service which can be reached for information and queries.
- Agents may charge a fee, but it might be easier to get the PAN card done through them.
- PAN card fee can be paid through bank draft, Credit card / Debit card or Net Banking.
List Of Pan Card Office in India 2019