Certain financial transactions demand the quoting of a Permanent Account Number (PAN), be it for an individual or a business firm. This piece of article will explain whose name shall appear on the PAN of a sole-proprietorship firm.
You do not have to apply for a new proprietorship firm PAN card for your sole-proprietorship firm. The department does not issue separate PAN cards for Sole Proprietor firms, as they do not have a separate legal existence like a company. A sole proprietorship business has a direct link with the business owner. The owner or the proprietor is solely responsible for sole proprietorship registration and all the debts/liabilities attached to the business. You can use your PAN for your proprietorship business as an owner. You can use the same PAN if you own more than one proprietorship business. Besides, any registrations such as MSME, GST, or IEC can be done with your PAN card. Also, per the notification issued by the Central Board of Direct Taxes (CBDT), it is now mandatory to link a PAN card with an Aadhar to file income tax. Also, the CBDT has recently issued a notification extending the last date for the linking to March 31, 2023.
Why Is a PAN Card Important for Your Sole Proprietorship Business?
As mandated in the Income Tax Act of 1961, a PAN is a must for all individuals, companies, partnerships, etc. If you are a company/business, PAN bears even more significance for you. It is the tax identity for any company/firm generating income. If you do not have a PAN, the Income Tax Department may consider you to be concealing important information related to your financial transactions from them.
Also, suppose you are without a PAN. In that case, you can’t enjoy the tax benefits offered by the Government, and you will be liable to pay taxes at the highest rate applicable. Also, banks require a PAN number to proceed with certain financial transactions. Therefore, it’s high time you apply for a pan card for your proprietorship company.
Documents Required While Applying for a Pan Card for a Sole Proprietorship Firm
As said before, separate PAN cards would not require for proprietorship firms. A sole-proprietorship firm can use the PAN of the proprietor.
The following documents are for the PAN card application by the proprietor:
- Proof of identity (Driving License/Voter ID/Passport)
- Proof of address (anyone from Telephone Bill/Electricity Bill/Water bill/Pension Payment Order)
- Proof of Date of Birth (anyone from High School leaving certificate/ pass certificate where the date of birth is present)
How to Apply Online for a PAN Card for a Sole Proprietor
The step-by-step procedure to apply for a PAN card for the proprietor is as below:
- Visit the PAN application page on the NSDL: https://nsdl.co.in/.
- Select ‘Form 49A’ or ‘49A’ from the ‘Application Type’ drop-down menu. From the ‘Category’ drop-down menu, select ‘individual’ for the sole proprietor.
- Mention the name, contact number, date of birth, Email Id, and other details asked for in the spaces provided.
- Enter the Captcha code and click ‘Proceed’.
- A token number on the screen will denote a successful registration with the NSDL service. Click the “Continue with PAN application form” button.
- On the next page, submit your digital e-KYC. Enter your personal details in the next part of the form.
- In the next step, you need to provide your AO (Accounting Officer) Code. You can get your code from the NSDL website by clicking the ‘AO Code Search for PAN’ link. Click ‘next’ to go to the document details & declaration section.
- In this stage, you must declare the documents you upload (such as your proof of identity, address, and date of birth).
- After you fill in all the details, check the application for errors. If satisfied, click the ‘proceed’ button.
- The next step requires you to pay the application fee. You can pay through net banking, debit/credit card, and demand draft.
- Once you have made the payment, you will receive an acknowledgment receipt bearing a 16-digit number on your email id. Further, with this number, you can check your Business Pan Card application status online on the NSDL website.
- Further, you need to send the following to the Income Tax PAN Services Unit, NSDL office, Pune:
- Self-attested hard copies of the documents uploaded
- The print of the online application form with two passport-sized photographs
- The signed acknowledgment receipt
- The Demand Draft also, if you have made the payment offline.
The hard copies must reach the NSDL office within 15 working days from the application date. The department officials will scrutinize your application and the supporting documents. They will issue the Business Pan Card within 15 business days if satisfied.
You can apply for a PAN card by following the procedure mentioned in this article. However, to avoid errors and rejections, you must hire Vakilsearch to apply for your PAN card hassle-free and speedily.
- Conversion of Sole Proprietorship to Partnership
- What are the features of Sole Proprietorship?
- Sole Proprietorship Set Up
- Features of Sole Proprietorship