PAN & TAN Registration

Yes. Under Section 139A of the Income Tax Act 1961, every company is required to apply for a Permanent Account Number. For newly incorporated companies, the Ministry of Corporate Affairs provides an integrated SPICe+ form through which PAN and TAN are applied for simultaneously at the time of incorporation, and NSDL/UTIITSL typically issues the PAN within 7 working days of incorporation. A company without a PAN cannot open a bank account, file income tax returns, or receive payments above ₹20,000 in cash without inviting the payer to deduct TDS at the higher rate of 20% under Section 206AA of the Income Tax Act 1961. The PAN must be quoted on all correspondence with income tax authorities, TDS certificates, and high-value financial transactions as specified in Rule 114B of the Income Tax Rules 1962.

Under Section 203A of the Income Tax Act 1961, every person responsible for deducting TDS (Tax Deducted at Source) or collecting TCS (Tax Collected at Source) must obtain a Tax Deduction and Collection Account Number (TAN) before making any such deductions. This covers companies, firms, LLPs, individuals and HUFs with business or professional income, trusts, and government offices. TAN is applied for via Form 49B filed with NSDL/UTIITSL. Failure to obtain TAN before deducting TDS attracts a penalty of ₹10,000 under Section 272BB of the Income Tax Act 1961 per default; additionally, quoting an incorrect TAN on TDS returns or challans also attracts the same penalty. TDS returns cannot be filed without a valid TAN, which leads to cascading late-filing fees under Section 234E at ₹200 per day.

Yes. A foreign company, branch office, liaison office, or project office registered in India with the Reserve Bank of India or the Registrar of Companies is required to obtain a PAN under Section 139A of the Income Tax Act 1961 if it has any Indian-source income or is responsible for deducting TDS. The application is made in Form 49AA (for foreign entities) to NSDL/UTIITSL along with proof of identity and address of the entity (certificate of incorporation from home country, apostilled and translated if required) and proof of the Indian office address. A liaison office (permitted under FEMA) is not allowed to earn income in India but still needs a PAN to comply with TDS deduction obligations on payments to Indian vendors, as required under the Income Tax Act. The Assessing Officer (International Taxation) jurisdiction applies to foreign companies for all income tax matters.

An individual applying for PAN uses Form 49A filed with NSDL/UTIITSL or through the income tax e-filing portal. For identity proof, any one of: Aadhaar, voter identity card, passport, or driving licence is acceptable as specified under Rule 114(4) of the Income Tax Rules 1962. For address proof, any one of: Aadhaar, utility bill (not older than three months), bank account statement, or passport is accepted. For an individual proprietor, there is no separate business-PAN — the proprietor's individual PAN serves as the business PAN, and the business name is not separately registered on the PAN card. However, if the proprietor wishes to register under GST or open a business bank account, the individual PAN is sufficient, and no additional business-entity PAN is required since a proprietorship has no separate legal existence distinct from its owner.

Under Section 272B of the Income Tax Act 1961, failure to comply with any provision of Section 139A — including quoting an incorrect or invalid PAN — attracts a penalty of ₹10,000 per default. When a deductee's PAN is not available or is incorrect, the TDS rate defaults to 20% (or the applicable rate, whichever is higher) under Section 206AA of the Income Tax Act 1961, which significantly increases the tax burden on the deductee. TDS returns filed with invalid PANs are rejected by the TRACES/TDSCPC system and are treated as short-deduction or non-filing, triggering a demand under Section 200A. The deductee also cannot claim credit for TDS in their income tax return if the PAN is misquoted, since the credit flows from Form 26AS which is PAN-linked. It is therefore essential to validate the deductee's PAN via the income tax portal before deducting TDS on any payment.