PAN Card in India is one of the most important document in relation to the banking and monetary transactions. A Permanent Account Number (PAN) is a ten-character alphanumeric identifier which is issued in the form of a laminated card by the Income Tax Department. It is issued to any “person” who applies for it or to whom the department allots the number without an application. Not only individual but even companies need to have a PAN Card in order to pay the taxes and claim benefits from the same. In this we will be discussing how to get a PAN card for registered NGO.
What is the Need of PAN card for Registered NGO?
The needs of PAN card for Registered NGO are as follows-
- First and foremost a PAN is required for opening a valid bank account.
- PAN ensure smooth monetary transactions and or any other transactions applicable under the Income Tax Act.
- The government has made PAN mandatory in order to receive funds.
- In order to receive funds from the NITI Aayog, a valid PAN Card is required.
Read our article:Overview on General Public Utility under NGO
How to get a PAN card for Registered NGO?
There are two types of ways to get PAN for Registered NGO. One is offline mode and other is by filing an online application.
The steps to apply for PAN using the offline method are as follows:-
- The authorized signatory/ President/ Secretary/ Treasurer/ member of NGO can apply to get PAN number by filling the application form which is Form 49A.
- The Memorandum of Association(MOA) or Constitution (Samvidhan) or Trust Deed of Trust/NGO/Society/Non Profit Company is required to submit along with application to obtain PAN.
- The copy of the Memorandum of Association (MoA) or Trust Deed that is to be submitted with PAN application must be signed with seal/stamp by authorized signatory.
- NGO can make resolution to authorize any member or any authorized person can submit the application.
- The PAN application should be accompanied by the identity and address proof of the applicant. The address and identity proof are mentioned in the Trust Deed or Memorandum of NGO.
- The PAN application is to be made to the assessing persons of authorized agency who have been specifically assigned by the Income Tax department to carry out the process and complete the function.
- After getting the application the authorized franchise/Agency provide Acknowledgement Slip with stamp seal and signature to receive application.
To ease the process of obtaining a PAN Card, the government of India has introduced an online portal wherein an individual or a company can apply for the PAN Card while sitting at their home.
Following step that is required to be followed to get PAN card for Registered NGO:
- The first thing to keep in mind is that an online application can be submitted for PAN Card but have to submit the memorandum or trust deed as evidence of identity and address proof of NGO.
- One can submit application by following the links authorized by Income Tax Department:
- When the online application for PAN is submitted, an NGO should select for submitting documents options. There are options available such as – Forward application documents physically or Submit digitally through digital signature or Submit digitally through e-Sign, during submitting the online application form.
- After that one has to select suitable mode of payment and fill significant details either by online payment or by Demand Draft through Bill Desk in the online application form submission. Other options and proceeding is stated in the application form.
- After the successful submission, an e-receipt will be generated which then needs to be saved and printed.
- Furthermore, recent photographs must be affixed on the receipt and the applicant must sign over the receipt in the space provided.
- Next, forward this receipt to NSDL e-Gov. along with supporting documents to ensure further processing of the PAN Card.
- The final step then would be to send all the documentary proofs because of PAN Card being an important document.
What are the Benefits of having a PAN card for Registered NGO?
The advantages of having PAN card for Registered NGO are as follows-
- The NGO’s receive funds from NITI Aayog time to time and in order to get such funds from the government, an NGO must have a PAN Card. This would ensure the authority and legitimacy of the bank transactions and the government will have a proper monetary detail of the NGO.
- The NGO’s are also involved in business transactions, buying and selling of stocks or purchasing lands or any property. Again to keep an account of all these transactions, it is important to have a registered PAN Card.
- The NGO as we see is involved in a lot many transactions and hence under the Income- tax Act, an NGO is treated as an assesse and therefore, it has to pay taxes. For successful payment of taxes a PAN Card is the foremost document.
What are the Consequences for not having a PAN Card?
Under Section 272B of Income Tax Act 1961, the penalty for not having a PAN Card is provided. According to the Income Tax department website, penalty of INR 10,000 can be levied.
This Section provides for penalty in case of default by the taxpayer in complying with the provisions relating to PAN, i.e., not obtaining PAN even when they are obliged to obtain PAN. In case the individual knowingly quotes incorrect PAN in any given document or intimating incorrect PAN to the person deducing tax or person collecting tax.
The above mentioned points makes it amplifying clear that PAN is a document of utmost importance and therefore PAN card for registered NGO is a mandatory requirement according to the Income Tax Act. This would ensure the NGO’s proper and smooth functioning.