PAN stands for Permanent Account Number which is an important card for all the potential taxpayers in the country. It plays an important role to build and maintain an efficient system for taxes. However, the government introduced a business PAN card for organizations or firms. The PAN card contains a 10-digit code that also acts as identity proof.
Business Pan Card
A Permanent Account Number or PAN card is a mandatory card for all taxpayers no matter if it’s a person or a company. It is an efficient way of filing a company’s or a person’s Income Tax Return.
Furthermore, the Income-tax department issues the pan card for business to the organizations. It is helpful for the authorities to keep the track of the taxpayers and stop tax evasion.
Why Your Business Should Have a Business Pan Card?
It has a lot of significance in your business. It tells about the tax flow of your company. In addition, the income tax department will become aware of the tax stream of your business.
There are multiple reasons why your business should have it:
- To make any business transactions the pan card will keep the track of your payments. This way the income tax department will have the record of your transactions thus you won’t face any difficulty.
- If you are running a foreign company then you must have one. This way you can avoid the highest taxes that the government will implement on you.
- It facilitates you to file your tax returns, payment of invoices without deduction, remittances, and more.
- If you require a TRN then having a pan card is a must.
- According to section 206AA, it is mandatory to have a business card for all the businesses that work with an Indian company. All the entities need to continue with their business.
- According to the rules of the income tax department, the government of India can charge 30% of your invoices in case you do not possess a pan card.
List of Businesses That Require Pan Card For Business
Any individual or a company that runs a business in India or has a company in a foreign country is eligible for a pan card. In addition, a company is generating revenues from outside the country yet it was registered in India also has to pay taxes.
Following are the entities that require an NSDL business pan card:
- Company
- Partnership firm
- Association of persons
- Trust
- Incorporation
- Limited company
- Private firm Limited Liability Partnership (LLP)
- Body of Individuals
- Association
- Foreign institutional investor
- Hedge fund
Difference Between Regular Pan Card and Business Pan Card
There are different types of pan cards for business that are for Indian companies and foreign companies. Foreign companies have to register for a pan card for business to proceed with their business in India. They can avail of this facility from the NSDL center by filling the form 49A.
Further, the foreign companies have to pay INR 107/- and it will take around 45 days to have their card. It is primary to provide all the necessary documents along with the form.
While on the other hand, the Indian companies/trusts/partnership firms must have a business plan. It is mandatory to have it to avoid any issues. The Indian company can apply through the NSDL or UTIITSL portal. Additionally, the procedure for a pan card costs only 100/-.
Read more details about regular Pan Card here.
Documents Required for Business Pan Card – For Indian Company
The documents that are required for an Indian company are as follows:
- POA and POI
- Copy of Certificate of Incorporation
- No Objection Certificate (copy) issued by MCA
Documents Required for Company Pan Card – For Foreign Company
The documents that are required to have it for a foreign company are as follows:
- Copy of registration certificate issued by an Indian official
- Copy of registration certificate issued by your native country
- The certificates should be attested by the Indian embassy
Apply for Business Pan Card – Online Procedure
The government has made it convenient for people to apply online. Additionally, to apply for the NSDL pan card online you have to follow these guidelines:
- Visit the NSDL website or portal and fill out the pan card application form 49A
- From the drop-down menu choose the application type “Firm”
- Fill in all the basic details in the given fields such as name, date of application, etc
- After that, you have to fill in the registration number and the company’s income details
- Next up, provide the Assessing officer code. In case you do not have it you can find it through the search panel of the portal
- Then, upload the required documents, especially the certificate of incorporation and POA along with the fee
- Lastly, you will receive an acknowledgment slip containing a tracking number to know the progress of your application
- You also have to send the acknowledgment to the NSDL head office containing your signature
Apply for Pan Card for Business – Offline Procedure
You can also apply offline as well by following these guidelines:
- Firstly, you have to download the pan card application form 49A from the NSDL website
- Fill in all the necessary information and attach the documents after printing out the form
- Submit this form to your nearest NSDL center
- The representative at the center will provide you with an acknowledgment that confirms your application submission
- After the complete verification, you will receive your PAN card at the given address of your company
Note: The charges for this application are 100/-
Benefits of Business Pan Card
Having a pan card for business is very beneficial for your business. Moreover, it is not only a proof of identity but also helps the government to put an end to tax evasion. Here is the list of benefits:
- It helps the startup business since the business requires trading and filing the tax returns therefore it is important to have one.
- The most important reason for having a pan card is taxation. Any entity that generates revenue of more than INR 10,000/- while his pan is connected to the bank. The respective bank will deduct 30% of TDS instead of 10%.
- For filing income tax returns it is necessary to have it.
- To purchase foreign currency the entity has to apply for a pan card since it makes the transactions with foreign currency easier.
- With this card, a company can sell unlisted shares of company that is worth more than 1 lakh.
- An individual can sell or purchase any unmovable property such as a house that is worth more than 10 lakhs.
- A pan card is also mandatory for those who want to sell or purchase a vehicle (4-wheeler).
- It is also necessary for paying orders, banker’s cheques, bank drafts, and cash deposits of more than 50 lakhs.
Summary
A business pan card is introduced by the government for business corporates in India or foreign countries. It is mandatory to have a pan card to run a business in India. It provides several benefits to the companies.
Furthermore, the companies must have this card to file their tax returns. This way the income tax department remains aware of the financial transactions and tax payments of the company and thus the company doesn’t face any trouble. Moreover, it helps to establish an efficient system for taxes and eradicates tax evasion.
FAQs
Q) How to get a business pan card?
You can get a pan card for business from the nearest NSDL center or through the online portal of NSDL. You just have to fill the Form 49A.
Q) Can I use my pan card for business?
Yes, you can use your pan card for your business. The government allows you to use the same card for business too.
Q) How to apply a pan card for small businesses?
The process for all the business types to have a pan card is the same. You can either use the online method or offline. It is optional.
Q) What is the business pan card fee?
For Indian companies, the fee is 100/- while for foreign companies the procedure costs 107/-.
