1.What is Permanent Account Number?
Permanent Account Number is the unique and permanent identification number given to every taxpayer. In short it is known as PAN. It consists of nine digits. It is allotted only once, and it never changes even if the place of business or nature of business or any other information changes. It is used only for the purpose of tax payment. PAN facilitates in identifying the taxpayer or TDS withholding agent uniquely through the nation. PAN is necessary to process taxpayers or TDS withholding agents using computer systems. The example of PAN is 100362257.
The Income Tax Act, 2058 in section 78 and Income Tax Rules, 2059 in rule 23 has made provision of issuing PAN by the Department of Inland Revenue.
2. Why is it necessary to obtain PAN? How would I be benefited?
It is necessary to obtain PAN because:
- The person engaging in industry, business, profession, transaction, employment shall mention his/her PAN in any bills, ledgers, documents, income returns, and any other documents related to tax.
- The PAN gives taxpayer a distinct and special identification which facilitates in his/ her business and it makes it easier to pay tax.
Thus, it would be beneficial as after you obtain PAN, it would be easier to perform transactions, to import, export, to take loan from banks and to do any other tax related works. It also helps to maintain transparency in the transactions and business.
3. Is it necessary to obtain separate PAN to do business of goods subject to excise duty is imposed?
If the individual has already obtained PAN, he/she need not obtain PAN again to engage in the business of goods subject to excise duty. An individual need to obtain license to engage in the business of goods subject to excise duty. The license shall be obtained apart from the business PAN.
4. Are the personal PAN and PAN for companies different?
Though the natural person and companies need to obtain different PAN, the unique number it is provided through same approach. Thus, the personal PAN and company’s PAN cannot be distinguished simply by looking at the numbers.
5. Where PAN would be necessary?
- Transactions, bills, ledgers, documents, income returns, bank documents and any other documents related to tax compulsorily require PAN,
- To obtain any convenience related to tax,
- To obtain tax related information,
- If PAN is put in the voucher of revenue राजस्व दाखिल, it would make record of revenue more secured.
6. Once PAN is obtained, is it necessary to obtain different PAN for VAT?
VAT and income tax both are administered by Inland Revenue Department and only one PAN is given for both. Thus, it is not necessary to obtain different PAN.
7. Does the individual with the income from employment need to obtain PAN?
8. What if a sole Proprietorship is to be changed into a Private Limited Company? Separate PAN is to be obtained?
9. I obtained PAN while I had retail shop in Biratnagar. Now, I have closed the retail shop and arrived Kathmandu and preparing for establishment of Industry. Do I have to PAN again in Kathmandu?
If the natural person is same, then new PAN is not necessary to be obtained even if the place of business or nature of business is changed. However, after such change, he/she must inform the Inland Revenue Office from which he/she had obtained PAN.
10. I have a wholesale shop. When I make invoice, do I have to write PAN of the buyer?
It is compulsory to mention your own PAN and the PAN of the buyer while preparing invoice. If done so, it would be easier to match the VAT paid by the buyer and the VAT you pay. As the invoice drawn at the time of sale reflects the true character of your business, PAN should be included in it. Furthermore, it helps the buyer to remain in touch with your business.
11. How Inland Revenue Department would know whether you have obtained PAN or not or whether you have mentioned in the invoice or not?
The Inland Revenue Department itself or with the help of Revenue Investigation Department can investigate upon whether PAN has been obtained or not, whether registered in VAT or not, whether quoted in invoice or not. For this purpose, there is special provision of market investigation. Where a person if required to engage in any business only after obtaining PAN is found without PAN, the IRD can take legal action as per Income Tax Act and Value Added Tax Act.
Moreover, as IRD compiles all the information of the taxpayer, it will know about your transaction relating to purchase and it may cost you additional tax. Thus, to save yourself from such additional tax, you should use PAN in your transaction. This also facilitates in minimizing the cost of tax participation.
12. What is e-PAN?
e-PAN means the PAN obtained through internet.
13. What is the procedure to obtain e-PAN? How it is issued?
- Login to ird.gov.np
- Click on e-PAN
- Click on get submission number
- Fill up all the details by entering username and password
- Then submission number will be received
- Click on PAN registration
- Fill up all the details seen on the screen
- Send it to the authorized office which has authority to issue e-PAN that you selected while filling up the details.
- If you need any confusion, you can click on help and take guidance.
Application for e-PAN is made to Inland Revenue Offices by submitting online form. Then the IRD issues e-PAN by obtaining necessary information from the submission number sent at the time online form is submitted.
In this way, to obtain e-PAN you can get online form and you can fill up and submit it online. However, you should go Inland Revenue Office to get PAN card.
14. Who should get PAN?
One who is engaged in employment or certain profession and having tax deducted at source is required to get a Personal PAN. Particularly, following persons should obtain Personal PAN.
- Person leasing house to governmental or quasi-governmental offices, companies or other institutions
- Professionals like Doctor, Engineer, Lawyer, Auditor, Individual Counsellor, Insurance Agent, Celebrities and Commission Agents
- Person transacting more than NRs 10,00,000.00 on shares
- Person having taxable income more than NRs 1,60,000 and for couple, having taxable income more than NRs 2,00,000.00, in case of income from employment.
- Person owning rental motor vehicles
Besides the individuals who are engaged in employment or any profession and having tax deducted at source, any companies and organizations conducting business and non- business activities must also obtain PAN. They include following
- Partnership Firms
- Private Limited Companies
- Public Limited Companies
- Other organizations like Charity Organizations, Hospitals, Educational Institutions, NGOs, INGOs.
Though individuals and companies need to obtain their own PAN, they cannot be differentiated on the basis of PAN.
15. Can Personal PAN be converted into Business PAN?
Yes. If you are to run a business, your Personal PAN can be converted into Business PAN. After registering your business, you may submit an application for change of PAN along with certificate of Registration of Business.
16. What are the details that are to be given and the documents to be submitted to obtain personal PAN?
To obtain PAN following details shall be given:
- Name, surname, permanent address, father’s name, date of birth, citizenship number.
Following documents are needed:
- A certified copy of Citizenship
- A certified copy of Passport on case of a foreign national
- A copy of certificate of Profession
- One passport sized photograph
In case of the natural person who shall not compulsorily obtain PAN, the certified copy of citizenship and One passport sized photograph would be enough if he/she wants to get PAN.
17. What documents are to be submitted to obtain PAN by companies?
In case of companies or organizations following are to be submitted:
- Copy of Company Registration Certificate
- Two identical passport size photos of the person who signs the application form. In case of Partnership Firms, two identical photos of each partner
- Sketched map of the location of the head office or the primary place of business.
18. What is the procedure to obtain personal PAN online?
- Log on to website of IRD and click on Taxpayer’s Portal,
- Enter on Application for Registration of Personal PAN and get submission number,
- Enter personal details after getting submission number,
- Upload your scanned photograph and citizenship,
- Print your submission number and submit it at IRO or Taxpayer’s Office.
The individual himself should be present at the office while getting the PAN as he is required to sign in the PAN Card.
19. What are the benefits of the Personal PAN?
PAN facilitates in the computerized record system which allow you to see the amount of tax paid at any time you want. In addition to this, it would be easier to get proof of tax payment and makes it more authentic.
20. Where can I get the format of application to obtain PAN and where shall I submit such application?
The application form can be downloaded from www.ird.gov.np or from the Inland Revenue offices, and if there is no Inland Revenue Office from Financial Comptroller General Office, Chamber of Commerce and Industry. Such application shall be submitted at Inland Revenue Offices.
21. Do you need pay any fee to obtain PAN?
No fee is to be paid to obtain PAN.
22. Can I obtain PAN from the place where I live if the Inland Revenue Office is far for me?
You can apply for e- PAN from any places through internet and send it to the concerned authorized Inland Revenue Office after obtaining your submission number.
The person who is engaged in employment can apply for his/her PAN through their employer too.
23. I have recently started an industry and it will take 4-5 years for me to earn profit from it. So, can I obtain PAN only after I start to make profit?
No, you should not wait until you make profit to obtain PAN. You should apply for PAN and obtain it before you start any business, profession or transaction.
24. Can One individual have more than one PAN?
A person (natural person or companies) can have one PAN only. It is allotted only once. The person will continue to have the same PAN throughout his/ her life.
25. Is it compulsory to give your photograph while applying for PAN?
In case of natural person, you should compulsorily give one passport sized photo. However, it is not necessary in case of companies.
26. I am a foreign national. Can I get PAN in Nepal? If I can, what are the documents that are to be submitted?
A foreign national who invests in industries, does business, engages in any transaction, employment in Nepal as per the prevailing law should obtain PAN. While applying for the PAN he/ she must submit a certified copy of Passport in addition to other necessary documents.
27. When a woman is applying for PAN, whose name shall she write, her father’s name or husband’s name or name of father in law?
While a woman is applying for PAN, she should compulsorily write name of her father, mother, husband or father in law.
28. Who shall apply for a non-resident person to obtain PAN?
In case of non- resident, his/ her representative can apply for his/her PAN.
29. I had obtained Income Tax registration Certificate before the rule of PAN was introduced. Do I also need to obtain PAN?
Yes, the person who has obtained income tax registration certificate should also obtain PAN compulsorily. PAN will replace such certificate. However, PAN will maintain constancy of the business of the past.
30. Is it necessary to renew PAN every year?
PAN is a permanent identity card. It need not be renewed every year. However, the taxpayer should inform the concerned Inland Revenue Office about the change in address, place of business or nature of the business if as such occurs.
31. How long will it take for me to obtain PAN card. Will they give me temporary PAN until the PAN card is ready?
You will be provided with temporary account registration certificate. However, to obtain PAN card and Permanent Account Registration Certificate, you must wait for one months. Once you get PAN card and Permanent Account Registration Certificate, it will replace temporary account registration certificate.
32. I do not have PAN. But I want to obtain Tax Clearance Certificate by submitting income returns and paying all the liable tax. What should I do?
A person needs to present his/her income return and pay the liable tax in case of the taxable income even though he/she has not obtained PAN. Thus, after you have cleared all the liable tax, you will get Tax Clearance Certificate.
However, it is beneficial to obtain PAN as a person without PAN will be fined and it is also very easy to obtain it and it is beneficial to the taxpayer him/herself.
33. I myself should be present to get my PAN card or I can send any other person?
To get PAN card, you yourself and in case of companies, the authorized representative of company needs to be present as signature is to be put.
34. Will I be punished if I conduct Business without obtaining PAN?
If you conduct business without obtaining PAN, you can be fine with the amount from Rs. 50000 to Rs. 30000 as per section 119 of the Income Tax Act.
Moreover, you will be restricted to import, export or any transaction with bank or any work related with governmental organizations.
35. I have personal PAN. I want to start a sole proprietorship business. Can I use the same PAN?
You shall submit an application to change int business PAN after getting the sole proprietorship in order to use the same PAN.
36. I got the form for application to obtain PAN. But I do not know how to fill it up. Where can I get information about it?
Inland Revenue Department has made Brochure directives to facilitate in submission of application for PAN. With the help of the brochure, you can easily fill up the form. Similarly, you can take help from the help desks of Inland Revenue Offices, Chamber of Commerce and Industry and www.ird.gov.np website.
In case, if you fill up wrong information in the application form, you can amend it later.
37. I have obtained business e-PAN. Now I want to quit business and only engage in employment. Can I use the same PAN?
In order to use the same PAN, you shall give application for changing such business PAN into personal PAN.
38. In what conditions, PAN can be dismissed?
PAN can be dismissed in case of death of the person, if he/she leaves Nepal by discarding Nepalese Citizenship. In case of foreign national, PAN is dismissed when he/she ceases to earn income.
39. What is the procedure of dismissal or deregistration of personal PAN?
Application should be submitted to Inland Revenue Offices by stating the reason of dismissal. There would be dismissal only in case of death of the person. Otherwise it will remain in your name in inactive condition in the system.