Permanent Account Number (PAN)
Income tax is the tax payable on income of a person after deductions, etc. at a percentage depending on the nature of a person (individual, company or firm). The Income Tax Department of the Government of India needs to identify a person for determining tax, and for this, every person/company liable to pay tax needs to apply for a Permanent Account Number (PAN).
Companies and LLPs (for income tax purposes, LLP is a firm) mandatorily require to have/obtain a PAN number for doing business. Apart from tax purposes, the PAN needs to be quoted in many instances.
What is PAN?
Permanent Account Number (PAN) is a 10-digit alpha numeric number like 'AAHFC2373B', issued by the Income Tax Department for the purpose of the identification of an assessee under Income Tax Laws. PAN is a unique, national and permanent identification and will not be affected by a change of address of the holder.
The first three characters i.e. "AAH" in the above PAN are alphabetic series running from AAA to ZZZ. The fourth character of PAN i.e. "F" in the above PAN represents the status of the PAN holder. (“P" stands for Individual, "F" stands for Firm, "C" stands for Company, "H" stands for HUF, "A" stands for AOP, "T" stands for TRUST etc.). The fifth character i.e. "C" in the above PAN represents first character of the PAN holder's last name/surname. The next four characters i.e. "7190" in the above PAN are sequential numbers running from 0001 to 9999. The last character i.e. "B" in the above PAN is an alphabetic check digit.
Company PAN
PAN for a newly registered company shall be allotted along with the registration of Company. The physical PAN Card will be despatched from the Income Tax Department by post to the registered office address with in 15-20 days of Company Incorporation. It is important to make necessary arrangements at the Registered Office address to receive the same. If it is returned undelivered, it becomes difficult to trace the same again.
In case the PAN Card is not received in 15-20 days of registration, it is advisable to apply for a duplicate PAN card.
Income Tax Department will also mail (Email: no-reply@nsdl.co.in) a copy of E-Pan Card. The password to open the same will be Date of Registration like DDMMYYY. In certain cases, this mail may not be delivered correctly. In such case, there is no mechanism to get the mail again.
LLP PAN
Unlike Company, PAN for LLP will not be allotted at the time of registration. Separate application for PAN has to be submitted after the registration of the LLP.
Once we submit the PAN Card Application for LLP, we will get the acknowledgement for fling the same. The acknowledgment is enough to open a Bank account for the LLP. The PAN can be updated to Bank once it is allotted.
The physical PAN Card will be despatched from the Income Tax Department by post to the registered office address with in 15-20 days of approval of Pan / TAN Applications. It is important to make necessary arrangements at the Registered Office address to receive the same. If it is returned undelivered, it becomes difficult to trace the same again.
In case the PAN Card is not received in 15-20 days of registration, it is advisable to apply for a duplicate PAN card.