Does a company need its own PAN?
Yes. A company needs its own permanent account number. Section 139A allots that number to a person, and a company is a person separate from its members and directors. The member’s personal PAN does not stand in for the company.
Why is the company’s PAN separate?
The number identifies the company for tax. The return, a tax deduction, and a payment the company receives are matched to that number. It is ten characters. The fourth character shows the category of the holder, and for a company that character is C. A partnership firm, a limited liability partnership, and a Hindu undivided family each have their own category. They are not given a company PAN.
A foreign company is not given a PAN merely because it exists abroad. It needs one when it has income chargeable to tax in India. Incorporating an Indian company is a different case: that Indian company needs its own number from the start.
How is it allotted?
A company incorporated now applies through SPICe+. The form allots the PAN and the TAN along with the certificate of incorporation. TAN is the number the company uses when it deducts or collects tax. It is not a second copy of the PAN. A company that was incorporated without a PAN, or that otherwise still has to apply, uses Form 49A and the certificate of incorporation. The incorporation filings are on the private company page and the one person company page.
What if the company has no PAN?
The company cannot file its return without the number. Where a payer is required to deduct tax and the company has not furnished a PAN, section 206AA requires deduction at the higher of the rate in the relevant provision, the rate or rates in force, and 20 percent. That is a deduction rule. It is not a substitute for allotting the number. The return the company then files is on the income-tax return page.
Frequently asked questions
Four questions cover a personal PAN, SPICe+, TAN, and deduction where no PAN is quoted.
Can the director use a personal PAN for the company?
No. The company is a separate person. Its PAN is its own. The fourth character of that PAN is C.
Does SPICe+ allot the PAN?
Yes. A company incorporated on SPICe+ is allotted its PAN and its TAN with the certificate of incorporation. A separate Form 49A is for a company that still has to apply.
Is TAN the same number?
No. TAN is the number used when the company deducts or collects tax. SPICe+ allots both. One does not replace the other.
What happens if a payer has no PAN to quote?
Where section 206AA applies, tax is deducted at the higher of the rate in the provision, the rate in force, and 20 percent.
Sources
A permanent account number is allotted under section 139A of the Income-tax Act, 1961. A company incorporated on SPICe+ receives its PAN and TAN with the certificate of incorporation.