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CS Executive · Setting Up of Business, Industrial and Labour Laws · Various Initial Registrations and Licenses

Meera Exports LLP has just been registered and wants to open a current account and file its income-tax return. Which statement about PAN is most accurate?

The LLP should obtain its own PAN. An LLP is a separate legal entity and taxable person, so its identity for income-tax purposes cannot rest on a partner's PAN. PAN is unique to each person, and TAN is a different number meant only for tax deduction or collection.

  1. AThe LLP should apply for a PAN in its own name, separate from its partners' PANsCorrect
  2. BThe LLP can use the PAN of its designated partner for all purposes
  3. CThe LLP needs a PAN only after its turnover crosses a prescribed limit
  4. DThe LLP gets a TAN, which works as its PAN

Explanation

An LLP is a separate legal entity and a taxable person, so it needs its own PAN. Using a partner's PAN is wrong because PAN is unique to each person. TAN is for tax deduction and is not a substitute for PAN.

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