How to apply PAN/TAN of a Foreign Company

PAN/TAN of a Foreign Company

1. What is PAN

In general speaking, PAN stands for Permanent Account Number which the Indian Revenue Department (Income Tax Department) allot to a Taxpayer / Company whose Income is Taxable in India. However, this is not the only condition. PAN number works in India as a Tax Identification Number.

For a comprehensive list of events for which a PAN number is required, you can refer to Rule 114B by following the below link: https://incometaxindia.gov.in/pages/rules/income-tax-rules-1962.aspx

2 . Documents be submitted by Foreign Company along with the PAN application

Below is the list of documents required for applying for PAN number by a Foreign Company in India:

1. Copy of Certificate of Incorporation,
2. Copy of Memorandum and Articles of Association,
3. Copy of 3 month’s bank statements,
4. Board Resolution favoring the person signing the application.

All these documents should be issued in the country where the applicant is located, duly attested by “Apostille” (in respect of countries which are signatories to the Hague Apostille Convention of 1961) 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; 

 

Can a Company hold more than one PAN?​

A Company cannot hold more than one PAN. If a PAN is allotted to a person, then he cannot apply for obtaining another PAN. A penalty of Rs. 10,000/- is liable to be imposed under Section 272B​ of the Income-tax Act, 1961 for having more than one PAN.

If a person has been allotted more than one PAN then he should immediately surrender the additional PAN card(s).

 

What is the penalty for not complying with the provisions relating to PAN?

Section 272B provides for a penalty in case of default by the taxpayer in complying with the provisions relating to PAN, i.e., not obtaining PAN, even though he is liable to obtain PAN or knowingly quoting incorrect PAN in any prescribed document in which PAN is to be quoted or intimating incorrect PAN to the person deducing tax or person collecting tax. The penalty under section 272B  is Rs. 10,000.

 

TAN OF A FOREIGN COMPANY

1. What is the TAN number?

Tax Deduction Account Number or Tax Collection Account Number is a 10-digit alpha-numeric number issued by the Income-tax Department. TAN is to be obtained by all persons who are responsible for deducting tax at source (TDS) or who are required to collect tax at source (TCS). It serves the purpose of Withholding Tax Account numbers in India.

2. Who must apply for TAN?

All those persons who are required to deduct tax at source or collect tax at source are required to apply for and obtain TAN.

 

Why to apply for a TAN?

The provisions of section 203A of the Income-tax Act require all persons who deduct or collect tax at source to apply for the allotment of a TAN. The section also makes it mandatory for TAN to be quoted in all TDS/TCS returns, all TDS/TCS payment challans, and all TDS/TCS certificates to be issued. Failure to apply for TAN or comply with any of the other provisions of the section attracts a penalty of Rs. 10,000/-.

 

Why is it necessary to have TAN?

TAN is required to be quoted in all TDS/TCS returns, all TDS/TCS payment challans, and all TDS/TCS certificates to be issued. TDS/TCS returns will not be received if TAN is not quoted and challans for TDS/TCS payments will not be accepted by banks. Failure to apply for TAN or not quoting the same in the specified documents attracts a penalty of Rs. 10,000/-

 

What are the documents that need to accompany the TAN application?

Below is the list of documents required for applying TAN number by a Foreign Company in India:

1. Copy of Certificate of Incorporation,
2. Copy of Memorandum and Articles of Association,
3. Copy of 3 month’s bank statements,
4. Board Resolution favoring the person signing the application.

All these documents should be issued in the country where the applicant is located, duly attested by “Apostille” (in respect of countries which are signatories to the Hague Apostille Convention of 1961) 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; 

 

In case a duplicate TAN has been allotted, Which TAN should be used?

In case duplicate TANs have been allotted, the TAN which has been used regularly should be used. The rest of the TANs should be surrendered for cancellation using the “Form for Changes or Correction in TAN” which can be downloaded from the website of NSDL (http://tin.nsdl.com).

 

For more information and updates, you can contact CA Rajeev Gupta or visit our website www.sigmac.co.in

 

About the Author: This article is contributed by CA Rajeev Gupta, Partner – SIGMAC & Co, Chartered Accountants, Location- Delhi NCR and Gurgaon.

In case of any query please feel free to contact us at: rajeev@sigmac.co.in

 

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Disclaimer: This content has been prepared for the general guidance of the reader on matters of interest only. It should not be treated as professional advice. You should not act upon the information contained in this article without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information or provisions of the law contained in this article. Author and/ or SIGMAC & Co., Chartered Accountants, its members, employees, and agents accept no liability and disclaim all responsibility for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this article or for any decision based on it.