PAN Card for Companies: Procedure and Importance

PAN card refers to the Permanent Account Number for the company, which can be applied online through Form-49A. The online application for new PAN is done through a DSC based application.

A company that is incorporated in India is considered as a separate legal entity, which means that the income of the company will be taxed separately from that of the owner or directors of the company.

PAN is considered a vital document for any person (natural or artificial) who is earning an income or generating revenue. PAN is a unique alphanumeric number allotted to that the person, required to be submitted with the Indian Income Taxation authority.

Earlier, there was no centralized authority that could issue PAN cards and was issued to 2 different entities. This created several compliance problems for the cardholder and the Government. 

What is PAN?

PAN is an important document that is used by taxpayers. It is a 10 character alphanumeric type of identity proof. PAN is also known as Permanent Account Number. It is enforced and governed under the Income Tax Act of 1961.

A PAN Card is essential for individuals, companies, and partnerships. It provides unique identity proof for a number of purposes.

Process for Company PAN Card Application

Step-1: Online application for PAN can be made on the NSDL (National Securities Depository Limited) website. Form 49A or 49AA is to be selected from the menu option. The 'company section' from the drop-down menu has to be chosen instead of individuals. 

Step-2: After filling in the form with the details like the name of the company, date of incorporation, and contact number, a token number will be generated and sent to you after which application can proceed further.

Step-3: All the documents are to be attached along with the application. The companies name and contact number will be prefilled, only the registration number of the company will have to be provided.

Step-4: The applicant will have to provide the Assessing Officer code, which is different for every jurisdiction. The applicant will also have to mention his source of Income on the application.

Step-5: Only an authorized signatory or director of the company can apply for  PAN. While obtaining PAN, certificate of company registration can serve as an address proof. 

Cost of Obtaining PAN

The PAN for the company can be obtained by submitting the required documents along with the prescribed government fees. The fees depend upon the mailing address of the applicant.

  • If the mailing address is within the territory of India the cost of PAN application will be Rs.110, and
  • If the mailing address is outside India the cost of application is Rs. 1,020.

Documents Required for PAN Card Application

Companies need to submit documents as address proof and identity proof. Every type of registered and unregistered companies requires a different set of documents depending on the type of entity that is registered.

 

Type of Business 

Documents Required

Trusts

 

1. Trust Deed

2. Certificate of Registration issued by Charity Commissioner

 

Partnership Firms

1. Partnership Deed

2. Certificate of Registration issued by Registrar of Firms

All Companies

under the Companies Act

1. Certificate of Incorporation issued by the Registrar of Companies

Limited Liability Partnership

Firms

 

1. Certificate of LLP registration issued by Registrar of LLP'S

 

Need of PAN Card for Companies

Corporate entities that are registered and working in India should apply for PAN card to help in their financial as well as tax-related transaction.

The companies need to provide their card number when they file the tax return. This is one of the mandatory requirement mentioned, as an entity with no PAN card submitting tax return will have to pay 30% of their earnings irrespective of the tax bracket that they fall into.

Hence, PAN is required for :

  1. Tracking all the financial transaction of your company.
  2. They help the companies in filing tax returns effectively and helps in getting remittances.
  3. The PAN needs to be quoted in every financial transaction of the companies and is mentioned in the invoice as well.
  4. Irrespective of the fact that the company is registered in India or outside India, if they are doing business here they are required to pay taxes and hence the PAN is required.

Company