PAN card for partnership firms – (A compulsion or not)

Introduction

Partnership companies are formed when two or more parties decide to work together to conduct commercial operations under the mutually agreed-upon conditions outlined in the partnership agreement. The nicest part about this corporate structure is that no single member will be responsible for covering the full loss suffered by a company. Most businesses have a formal, legally-authorized agreement before starting the business since a verbal agreement is worthless for tax purposes.

What is PAN Card?

PANs are used to identify different taxpayers across the nation. A 10-digit unique identity alphanumeric number called a pan card is given to Indians, usually to those who are tax payers.

Every entity that pays taxes in India is given a special identifying number via the computer-based PAN system of identification. By using this technique, a person’s whole tax-related information is stored against a single PAN, which serves as an important key for information storage. Since this is shared throughout the nation, no two individuals in tax-paying organizations may have the same PAN.

Is PAN Card Compulsory for Partnership Firms?

In India, the Indian Partnership Act of 1932 governs all partnership firms. It has been cleared in Section 4 that a partnership is a relationship between two people who have agreed to share the earnings from a firm that is operated, so everyone who has joined the partnership is required to have a PAN card for the partnership firm. The certificate of registration or partnership agreement, which serves as evidence of the firm’s existence, must be submitted along with PAN Card form 49A when filing an income tax return.

Documents required for PAN Card in case of partnership

• Agreement of Partnership
• Certificate for a digital signature
• Proof of the residence of the office –
• Rental agreement
• Sale agreement
• NOC from the owner
• Recent utility bills, no more than three months ago
• Evidence of Office Residency
• Proof of partners’ identities, including addresses
• A verified affidavit certifying that the information supplied is genuine and along with an accurate Registration Certificate

Online application process for PAN Card

Follow the below steps to apply for a PAN card using Income Tax Department’s website:

• Use this link to get to the NSDL’s main webpage.
• Click on the New PAN for Indian Citizen or Form 49A option on the home page.
• Before beginning to fill out the form, make sure you carefully read the instructions.
• Give the additional information required while choosing Firm as your category.
• If there are any formatting mistakes, a response will be issued that details them.
• The applicant must then revise the form as needed and submit it again.
• Next, select a payment method from DD, credit or debit card, net banking, or check to finish the INR 105 transaction.
• Take a printout of the acknowledgement slip once the procedure is finished.
• Attach a current passport-sized photo to the slip and sign your name with black ink
• Within fifteen days, transmit this acceptance receipt and the other supporting papers to the Income Tax Department.

Offline Application Process for PAN Card

• If you do not have access to the internet, you can apply for a PAN Card by visiting the local TIN office.
• Requesting for an application form.
• Use a black ballpoint pen to fill out the form, and make sure to review all the information there.
• The application must be signed by the managing partner.
• Submit the application, include all necessary documentation, and pay the registration fees (INR 105).
• The PAN card will arrive at the given address in around fifteen days after the information is verified. You may use the acknowledgment number you will receive after completing the registration to check your PAN Card online.

PAN Card Application Details for Partnership Firm

To apply for a PAN card as a partnership business, you must provide the information listed below:

• Name of the business as it appears on the Certificate of Registration, with an M/S tag.
• Date of incorporation as per the partnership agreement.
• Address of the office as per the partnership agreement.
• In your application’s status field, select Partnership Firm.
• Select “Income from the Business” on the form as per your income source.
• Select the proper business code using the guidelines below.
• Mention all the evidence you’ll be providing, including the supporting papers.
• Mention the authorized partner’s name in the Declaration.
• Mention the location and the date at the last.

Conclusion

PAN is a legal necessity for handling the tax responsibilities, thus businesses, enterprises, trusts cannot afford to skip it. The PAN card is used by the income tax department to track all financial activities. The partners won’t be able to carry out any tax-related business operations without PAN.

Suggested Read: How to Download E PAN Card using NSDL Portal?