PAN, TAN & Other Statutory Registrations

What are statutory registrations?

Statutory registrations are the IDs and certificates a business must hold under law, beyond the registration that creates it. Two are central: PAN, your identity for income tax, and TAN, which lets you deduct tax at source. The rest are mostly set by your state, chiefly Professional Tax and Shops & Establishment registration.

None of them is optional once it applies to you, and most apply from the day you open your premises or hire your first employee. Getting them in place early is what lets you open a bank account, pay staff and vendors properly, and avoid penalties later.

What each registration covers

Each one does a different job, and holding one doesn't replace another:

PAN

The Permanent Account Number is a 10-character ID issued by the Income Tax Department. Every taxpayer, individual or business, needs one, and it's quoted on tax returns, bank accounts, and most large transactions.

TAN

The Tax Deduction and Collection Account Number is a separate 10-character ID for anyone who deducts or collects tax at source. It's quoted on every TDS payment, return, and certificate. A PAN can't be used in its place.

Professional Tax

A tax that states levy on professions, trades, and employment, capped at ₹2,500 per person per year. Not every state charges it. Where it applies, an employer registers to deduct it from salaries, and the business usually enrols to pay its own.

Shops & Establishment

A registration under your state's Shops and Establishments Act that records your shop, office, or other commercial premises with the labour department. It sets rules on working hours, holidays, and leave for staff there.

Central vs. state

PAN and TAN are issued nationally and work in every state. Professional Tax and Shops & Establishment are state registrations, so the rules, fees, and deadlines depend on where your premises are.

Registrations that come with headcount

EPF generally applies once you have 20 or more employees, and ESIC once you have 10 or more in a covered area. Both are employer registrations that sit alongside the ones above.

Validity

PAN and TAN last for the life of the business and never need renewing. Professional Tax registration is also permanent, though payments and returns are ongoing. Shops & Establishment registration is permanent in some states and renewable in others.

Who needs which?

What you need depends on how the business is set up, where it operates, and whether it has staff:

Proprietors

A sole proprietorship uses the owner's personal PAN — there's no separate business PAN. The proprietor still needs a TAN if the business deducts TDS, and the state registrations for the premises.

Partnership firms, trusts, and societies

Each needs its own PAN, applied for in the firm's or organisation's name, and a TAN once it deducts tax on salaries, rent, or payments to contractors or professionals.

Companies and LLPs

PAN and TAN are issued at incorporation. The state registrations still have to be done separately afterwards, except in the few states where SPICe+ includes them.

Employers

Any business with salaried staff needs a TAN to deduct TDS on salaries above the taxable limit, and Professional Tax registration in states that levy it.

Businesses with premises

A shop, office, restaurant, or other commercial establishment generally needs Shops & Establishment registration. Some states exempt very small establishments, or accept a simple online intimation instead.

Businesses making TDS payments

Paying rent, contractors, or professional fees above the TDS thresholds means deducting tax, which needs a TAN even if you have no employees. Individuals deducting TDS only on a property purchase or rent use a PAN-based form instead.

Why they matter

Beyond being required, these registrations are what much of day-to-day business depends on:

Opening a bank account

Banks need the business's PAN to open a current account, and often ask for a Shops & Establishment certificate or another registration as proof that the business exists.

Deducting TDS lawfully

Without a TAN you can't deposit TDS or file TDS returns. Not having one when you're required to attracts a ₹10,000 penalty, and TDS payments without a correct TAN are rejected.

Avoiding penalties and interest

Late registration and late payment of Professional Tax carry penalties and interest, and operating premises without Shops & Establishment registration can bring fines on inspection.

Other registrations depend on them

GST, MSME Udyam, IEC, and most licences are linked to your PAN. A Shops & Establishment certificate is often asked for as address proof in other applications.

Credibility with clients

Larger clients and government buyers check PAN, and deduct TDS against it, before paying invoices. A missing or wrong PAN can mean TDS at a much higher rate.

Clean records for funding and audits

Investors, lenders, and auditors check that statutory registrations are in place. Gaps found late tend to hold up a round or a loan.

The four registrations, side by side

These aren't alternatives to choose between. Most businesses with premises and staff end up needing all four, so it helps to see how they differ:

Documents you'll need

Proof the business exists

For a firm, company, LLP, or trust: the partnership deed, Certificate of Incorporation, or trust deed. A proprietor uses their own PAN and ID instead.

PAN of the business and signatory

The business's PAN is needed for TAN and the state registrations, along with the PAN of whoever signs the applications.

Address proof of the premises

A recent electricity bill, property tax receipt, or rent agreement. If you don't own the premises, a no-objection letter from the owner.

ID of owners, partners, or directors

Aadhaar and PAN of the proprietor, partners, or directors, with photographs where the state asks for them.

Employee details

For Professional Tax and Shops & Establishment: the number of employees and their salaries, since fees and deductions depend on both.

Authorisation

A board resolution or authorisation letter naming the signatory, when someone applies on behalf of a company, LLP, or firm.

DSC or Aadhaar OTP

Most applications are signed online. Companies and LLPs generally use a DSC; individuals and firms can often use an Aadhaar OTP.

Application process

Everything is applied for online, and most registrations come through within a few working days to a couple of weeks:

1. 1

   Work out what applies

   Based on your entity type, state, premises, and staff, we list which registrations you need now and which will apply later as you grow.

2. 2

   Collect documents

   Gather the entity documents, premises proof, and IDs once, since most of them are reused across every application.

3. 3

   PAN, if not already issued

   Firms, trusts, and societies apply for PAN online. Companies and LLPs already have it from incorporation. It's usually allotted within a few working days.

4. 4

   TAN

   Apply online for TAN in the business's name before the first TDS deduction. It's usually allotted within a few working days.

5. 5

   State registrations

   Register for Professional Tax (where levied) and Shops & Establishment on your state's portals, uploading the documents and paying any fee.

6. 6

   Certificates issued

   Once each department approves the application, you receive the certificates, and we set up the payment and filing dates that come with them.

What happens after registration?

Most of these registrations come with ongoing obligations — the certificate is the start, not the end:

Quote PAN and TAN correctly

Use the business's PAN on tax filings and bank records, and its TAN on every TDS payment, return, and certificate. A wrong TAN can mean payments aren't credited.

Deposit TDS and file returns

TDS is generally deposited by the 7th of the following month, with quarterly TDS returns and TDS certificates issued to the people you've deducted from.

Pay Professional Tax on time

Deduct Professional Tax from salaries and deposit it, then file returns on your state's schedule, monthly or yearly. The business's own Professional Tax is usually due once a year.

Display and maintain the S&E certificate

Keep the Shops & Establishment certificate displayed at the premises, maintain the required staff registers, and renew it if your state requires renewal.

Update records when things change

A change of name, address, or signatory has to be updated with each department, including a new Shops & Establishment registration or amendment if you move premises.

Watch headcount thresholds

As the team grows, registrations like EPF and ESIC become mandatory. It's easier to register when you cross the threshold than to backfill contributions later.

Advantages and responsibilities