Why does your company need a PAN card?

Some of the reasons why getting a PAN Card is important are listed below.

• 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.
  
• In the case of foreign companies, it was made mandatory under Section 206AA, amended in 2009 in 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 incorporation, 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.
  

Documents Requires for PAN Card for Indian Company

Indian companies applying for a PAN card have to submit the following documents along with the application form:

Proof of identity/proof of address:

• Copy of Certificate of Incorporation
  
• Copy of No Objection Certificate issued by Ministry of Corporate Affairs.
  

Documents Required for PAN Card for Foreign Company

In the case of foreign companies applying for a PAN card, the following supporting documents are to be submitted.

Submit any one of the following as ID and address proof:

• Copy of Certificate of Registration issued in the country where the applicant is located, duly attested by “Apostille” or by the Indian Embassy or High Commission or Consulate in the country where the applicant is located or authorized officials of overseas branches of Scheduled Banks registered in India
  
• Copy of registration certificate issued in India of approval to set up office in India by Indian authorities.
  

As an applicant, you will need a bank draft which is used to pay the Income Tax Department the fee for the issuance of the PAN card. The fee is 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.

How to get Apostilles for the documents?

As a foreign company applying for a PAN card, all documents submitted have to be apostilled. 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.

Tips on PAN Card for Companies

• Read the instructions on the form and ensure all supporting documents are included when the application is sent.
  
• The form should be filled in block letters with a black pen in case of offline forms.
  
• 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.
  
• Depending on whether the company is Indian or a foreign one, the method of paying the fee would differ.
  

How to Apply for a PAN Card 

Step 1: Visit the NSDL website's Online PAN Application section

Step 2: Select 'Firm' from the 'Application Type' and fill in details such as company name, date of incorporation

 Step 3: Fill in the company registration number and income details, as well as the communication address.

Step 4: Fill in the Assessing Officer (AO) Code (you can find the code on the'AO Code Search for PAN' page on the NSDL website

Step 5: Upload copies of the required documentation and pay the requisite fee.

Step 6: You will receive an acknowledgment number, which can be used to track the status of your PAN application.

Step 7: Send the signed acknowledgement form within 15 days of filling in the online application to the NSDL and collect your PAN card.

For more information visit Taxaj

Posted by Mohini

Team Taxaj