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CA IndiaPunith & AssociatesChartered Accountants

Registrations a business needs after it is set up, under tax, labour and local laws.

PAN and TAN

The Permanent Account Number is a ten-character alphanumeric number issued by the Income Tax Department and is required for most financial transactions. The Tax Deduction and Collection Account Number is required for every person who deducts or collects tax at source.

Tax Residency Certificate

A resident who claims relief under a Double Taxation Avoidance Agreement in another country applies to the Assessing Officer for a Tax Residency Certificate. The application is in Form 42 (earlier Form 10FA).

TDS certificates

A person who deducts tax issues a certificate to the person from whom it is deducted, for example the certificate an employer gives each employee for tax deducted from salary (Form 16 under the 1961 Rules). The forms have been renumbered under the Income-tax Rules, 2026.

Provident fund

The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 has been replaced by the Code on Social Security, 2020, in force from 21 November 2025. Provident fund provisions apply to establishments with 20 or more employees, and others may opt for voluntary cover. The wage ceiling is Rs 15,000 a month. Services cover registration, amendments and monthly returns.

Employees’ State Insurance

The Employees’ State Insurance Act, 1948 has also been replaced by the Code on Social Security, 2020. The schemes and rules made under the old Act continue for a transition period up to 20 November 2026. ESI applies to establishments with ten or more employees.

ItemCurrent position
Wage ceiling for coverageRs 21,000 a month (Rs 25,000 for persons with disability)
Employer’s contribution3.25% of wages
Employee’s contribution0.75% of wages
Total4.00% of wages

Profession tax (Karnataka)

Levied under the Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976. Employers register and deduct tax from salaries, and persons in business or profession enrol. From 1 April 2025, tax on salary of Rs 25,000 or more a month is Rs 200 a month and Rs 300 for February. The Act exempts senior citizens and certain persons with disabilities.

Trade licence

A licence from the local authority to carry on a trade listed in Schedule X of the Karnataka Municipal Corporations Act, 1976, such as hotels and restaurants, lodging, nursing homes, laundries and food processing. In Bengaluru, the Bruhat Bengaluru Mahanagara Palike has been replaced by the Greater Bengaluru Authority and five city corporations under the Greater Bengaluru Governance Act, in force from 15 May 2025.

Import Export Code (IEC)

A PAN-based code issued by the Directorate General of Foreign Trade, required for import or export of goods and services. It has no expiry, but the holder must update or confirm its details online every year between April and June, failing which it is deactivated. It is not required for goods imported or exported for personal use.

Udyam (MSME) registration

Udyam Registration replaced the Udyog Aadhaar Memorandum from 1 July 2020. It is online and based on self-declaration. The classification limits were revised from 1 April 2025 and are the same for manufacturing and services.

ClassInvestment in plant, machinery or equipmentAnnual turnover
MicroUp to Rs 2.5 croreUp to Rs 10 crore
SmallUp to Rs 25 croreUp to Rs 100 crore
MediumUp to Rs 125 croreUp to Rs 500 crore

Shops and commercial establishments

Registration under the Karnataka Shops and Commercial Establishments Act, 1961 is to be obtained within 30 days of starting business. Under the amendment Act notified on 4 September 2026, a registration remains valid until the business closes and needs no renewal, and establishments with ten or more workers that are registered under the Occupational Safety, Health and Working Conditions Code, 2020 need no separate registration.

Startup recognition

Recognition is given by the Department for Promotion of Industry and Internal Trade (DPIIT). A recognised private limited company or LLP incorporated on or after 1 April 2016 and before 1 April 2030 may apply to the Inter-Ministerial Board for a certificate to claim a deduction of profits for three consecutive years out of its first ten, under Section 140 of the Income-tax Act, 2025 (earlier Section 80-IAC). Angel tax on share premium was abolished from assessment year 2025-26.

Other registrations

  • Food licence or registration (FSSAI)
  • Trade mark applications
  • Digital signature certificates
  • Registration and approval of trusts under income tax law