A Permanent Account Number (PAN) card is required for every company registered in India. A PAN card is a basic financial identity document that is necessary for tax filing, business-related transactions, and statutory purposes. This blog provides a comprehensive guide to everything you need to know about the process of obtaining a PAN card for a company in India.
What is a PAN Card of a Company?
PAN (Permanent Account Number) is an alphanumeric number that is 10 characters in length, and the Income Tax Department designates it. Similar to individuals, companies also need a PAN card to undertake all financial dealings and to file tax returns, maintain bank accounts, and register for GST. A company obtains the PAN in the name in which the company is registered, and the PAN will remain valid until the time the company exists.
Why is PAN Mandatory for Companies in India?
According to the Income Tax Act, 1961, a company incorporated in India has to acquire a PAN card. Companies are also required to mention their PAN during tax payment, fill tax returns, upload invoices, accept payments above 50,000 Rs, and so on. In the absence of PAN, companies are unable to do:
- Get a current account in any bank.
- Sign the contract with clients.
- Enroll in GST and other taxation plans.
- Make cross-border financial transactions.
Documents Required for Applying for a Company PAN
The important documents that companies will require in applying for PAN are as follows:
- Certificate of Incorporation
- This is issued by the Ministry of Corporate Affairs (MCA) and it is documentary evidence of the existence of the company.
- Memorandum of association (MOA) and Articles of association (AOA)
- These determine the range and principles of work of the company.
- Address Proof- Company
- The address to confirm the registered office address can be utility bills or lease contracts.
- Identity Proof of Authorized Signatory, Identity and Address
- Usually, the influential figure of the company is the signatory to the company.
The Process of Obtaining a PAN Card for a Company
1. Online Application via NSDL or UTIITSL
One can simply apply for a company PAN online using either of the websites of NSDL or UTIITSL. Complete the Form 49A (which is applicable to Indian Inc.) with the legal information of the company. Do scans of backup documentation and pay nominal processing fees.
2. Offline Application
Offline application is also available where you will download Form 49A, make copies of the documents you are required to submit, and hand them to the nearest NSDL or UTIITSL points.
3. Delivery and Processing Time
After duly filing and confirming the application of the company, the PAN card is normally delivered to the address of the company within 15 to 20 working days. Though there is always a strong likelihood that an e-PAN is sent to the email you are registered to, even before that.
The PAN Status Checking Process
It is simple to keep track of the status of the PAN application, which the companies can do using the Acknowledgement Number that is supplied during the application process. Visit the site of NSDL or UTIITSL and input your acknowledgement number and update the status in real time.
What Happens if a Company Operates Without a PAN?
It is against the Indian tax laws to operate a company without a PAN card. The firm might undergo:
- Income Tax Act Penalties.
- Increased rate of tax deduction on transactions.
- Problem of monetary transactions such as loan application, opening business accounts or tax submission.
Conclusion
One of the primary steps to take after incorporating a company in India is to obtain a PAN card. It is one of the most important documents that guarantee the effective functioning of your company and its compliance with the tax legislation. The process of PAN application is an easy process and the company should ensure that it keeps a valid and updated PAN always to stay out of legal havoc.
And when you are in the process of registering a company, you are not to take this as another essential step of compliance because your PAN of the company will allow you to conduct all the business in a smooth manner.
