TAN, PAN and Director KYC

Tax Deduction Account Number, also known as Tax Collection Account Number (TAN) is issued by the Income Tax Department (IT department). TAN is required by individuals who are responsible for collecting Tax Deductible at Source (TDS) or Tax Collected at Source (TCS). If one is defraying salary/commission, that entity must have a TAN which may include sole proprietors, Joint Hindu Families (JHFs), corporations, individuals, trusts, etc.

Minimal documentation such as PAN (for sole proprietors basically) or Certificate of Incorporation (in case of corporates) is required for obtaining TAN per se.

Please note that even minors (person below the age of 18 years) and non-citizens also require PAN. The below-mentioned entities need a PAN:

• Individuals liable to pay taxes in India;
• Importers/exporters subject to any tax or duty charges under the IT Act or any prevalent law;
• All forms of trusts, charitable organisations, and associations;
• Entities like minors, sole proprietors, JHFs, partnerships, corporations, etc.

• Serves as identity proof;
• The best method to track your taxes. You might be required to pay taxes multiples times because due to lack of PAN your tax payment can’t be verified;
• Important for ensuring compliance against tax evasion;
• It can be utilised to avail of electricity, telephone, LPG, and internet connections.

DIR 3 KYC, popularly known as Director’s KYC, refers to Know Your Customer (KYC), using which the government reconfirms your identity. All the Directors of all kinds of companies and all partners and designated partners of all the LLPs need to file for DIR 3 KYC.

As per the amendments by Ministry of Corporate Affairs (MCA) inter alia insertion of Rule 12A under the Companies (Appointment and Qualification of Directors) Rules 2014, makes it mandatory for the mentioned people to update the KYC in e-Form DIR 3 KYC. Failing to do the same will attract a penalty of INR 5,000.

All the Directors have to provide their personal contact numbers and email IDs in the form which is verified via OTP (One Time Password). Further, Directors have to use their own Digital signatures for the filing process and this eForm has to be certified by a practising Chartered Accountant (CA), Company Secretary (CS) or Cost and Management Accountant (CMA).

• Digital Signature Certificate (DSC) of the Director or Designated Partner
• Permanent Account Number (PAN);
• Voters Identity card or Passport (mandatory for foreign national) or Driving License;
• Aadhaar card;
• Personal Mobile;
• Personal Email Address;
• Current Address Proof (latest bank statement or post-paid mobile bill or electricity bill).

The documents have to be attested by a practising CA, CS or CMA.

We have a dedicated team for individual taxation issues, comprising experts for every kind of tax problem which can arise on various stages of filings and compliances.

We have been dealing with complex taxation issues of individuals as well as of corporations regarding cross-border transactions, international taxation and tax planning and documentation.

We help you with your TAN, PAN and Director KYC, along with providing a range of other services to take full accountability as your virtual CFO.