According to the Income Tax Act of 1961, every taxpayer living in India, whether an individual or a company, needs to have a permanent account number, often referred to as a PAN. Acting as an identity proof for multiple purposes, a PAN is a mix of numerical digits and English alphabets forming a unique 10-character number. To get a PAN card, the applicant needs to submit a host of documents and identifications.
Here�s what one must know if they want a PAN card for themselves or their business:
What Types of Businesses Require a PAN Card?
Every organisation that is generating money in the Indian economy, irrespective of its origin, needs to get registered in India, have a business PAN Card, and pay tax as per the government guidelines. Moreso, any organisation that is registered in India but operates overseas must have a PAN and be liable to pay tax in India.
A PAN card is necessary for a business, as every transaction that occurs gets recorded and goes through the PAN number. This also aids in determining the flow of tax in the organization. Even when an individual or an organisation does not fall into any of the taxable income slabs, i.e., they are not eligible to pay tax as per the tax benefits given by the government of India, they still need a PAN card.
Here�s a list of entities that require a PAN to operate in India:
- Individuals
- Hedge Funds
- Trusts
- Partnership Firms
- Limited Liability Partnerships (LLPs)
- Limited Companies
- Incorporations
- Private Firms
- Foreign institutional investors
Why Should a Company Have a PAN Card?
Any money-generating individual or firm must have a PAN card for various reasons. Get a detailed view below:
- To get a Tax Registration Number, often referred to as a TRN number, one must have a PAN number.
- If one does not have a PAN card, the government has the authority to charge him/her/them 30% or more of what is earned. In simple words, more than 30% of all invoiced payments can go to the government in no time.
- The Permanent Account Number helps to pay all invoices without any deductions, remittances, filing of tax returns, etc.
- Any tax-related documentation or transactions occurring in India require a PAN number. This is because the PAN number allows the Income Tax Department to keep a thorough check on all transactions, keeping one out of tax trouble.
- Under Section 206AA of 2009, all foreign organisations are liable to pay tax as long as they are operating in India. Thereby, they become liable to own a business PAN card to continue their business in the country. If not followed, the government of India holds complete authority to charge the highest possible tax rates.
How Do I Apply for a PAN Card?
The two primary methods to apply for a company PAN card are online and offline.
Online Method of Application
An online application can be made through either the portal of�UTI Infrastructure and Technology and Services Limited�or the�Protean�portal (formerly known as NSDL e-Gov). Here�s a step-by-step guide to applying for a PAN card in India.
Step 1: To apply for a PAN card online, an Indian citizen needs to fill out�Form 49A, and a foreign national needs to download�Form 49AA.
Step 2: Once the form is filled out, payment can be made using a debit or credit card or using net banking.
Step 3: After the payment has been completed, the next step is to upload the supporting documents on the same form.
Step 4: The applicant will receive an acknowledgement number that can be used to track the application status.
Step 5: After the documents are verified, the applicant will be issued a business PAN card for the company.
Offline Method of Application
Follow these steps if you are filing your application offline:
Step 1: Download and print a copy of Form 49A or 49AA, as necessary.
Step 2: After filling in the necessary information, the applicant is required to paste his or her passport-size photograph on the form and attach the supporting documents.
Step 3: Next, the applicant must put them all in an envelope along with the required application fee in the form of cash or a demand draught (DD).
Step 4: The envelope must be sent to the nearest NSDL PAN Application Center or UTIITSL PAN Application Center.
Step 5: Thereafter, NSDL/UTIITSL will issue an acknowledgement receipt with the acknowledgement number that will act as proof for the documents submitted.
Step 6: The applicant may track the status of the PAN card using the same acknowledgement number.
Step 7: Once the documents are verified, NSDL or UTIITSL will issue a PAN card in the applicant�s name.
Documents Required
The two documents an Indian company is required to submit when applying for a PAN card are a copy of the “Certificate of Incorporation” and a copy of the “No Objection Certificate,” which must be issued by the Ministry of Corporate Affairs.
In the case where a foreign company is applying for a business PAN card, the applicant requires two documents, which are as follows:
- A copy of the Certificate of Registration issued in the country where the applicant is located. (It must be duly attested by the Indian Embassy or by the Apostille or High Commission, or Consulate in the native country, or by authorised officials of overseas branches of scheduled banks registered in India.)
- A copy of the registration certificate issued by the Indian authorities approving the setting up of an office in India
For an Indian communication address, the application charges amount to Rs. 93 (excluding goods and services tax), while for a foreign communication address, they amount to Rs. 864 (excluding goods and services tax).
FAQs on How To Apply For Business PAN Card in India
What are the four types of PAN cards?
- PAN Card for Resident Individuals
- PAN Card for Foreigners
- PAN Card for Indian Companies
- PAN Card for Foreign Corporations
Is business PAN different from normal PAN?
Yes. While an individual and its sole proprietorship firm are the same entity in the eyes of the law, a partnership firm requires a new PAN of its own.
Can I use my personal PAN card for business?
Yes. A sole proprietor can use his or her PAN card as an owner.
What is a�business PAN card,�and how can I get one?
It is a PAN card required by a company or a partnership firm making money in the Indian economy. Fill out Form 49A or 49AA as necessary, attach the supporting documents, and make payment to initiate the application process.
Can a company have two PAN cards?
No. It is illegal for an individual or a company to have multiple PAN cards.
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