Sole proprietorship is the business managed by single person and it is the simplest form of business under which one can start operating with a new business. There is no distinction between the business entity and the owner here, hence sole proprietorship has no separate entity. Under Sole proprietorship, the owner is himself liable for all his debts.
The sole proprietorship is a popular kind of business form because of its easy setup, simplicity and nominal cost. As the compliance is minimal so the sole proprietor business PAN card requirement is something which is not mandated for them to obtain separately. The detail on whose name can be on sole proprietor business PAN card often confuses people. So, this article has tried its best to solve all doubts on sole proprietor business PAN card requirement.
Whose Name can be on a Sole Proprietor Business PAN card?
In case of a sole proprietorship firm it is not mandated to apply for a separate or new sole proprietor business PAN card. As these firms do not have a separate legal existence like a company so they can use their own “sole proprietor business pan card” for theirfirms. A sole proprietorship business is connected straight away with the owner of the business.
The sole proprietor is exclusively responsible for registration of his sole proprietorship. The sole proprietor can use his personal PAN for running his proprietorship business. Therefore, there is no need of any separate proprietor business PAN cards. The sole proprietor can use the same PAN for any number of proprietorship firms he owns.
Therefore, the sole proprietor can use his own name in his business PAN card. He can do every registration like GST and MSME with his own PAN card and even the Income Tax Return of the sole proprietorship firm can be filed with that same PAN card.
Read our article:A Complete Overview on Tax Obligations for Sole Proprietorship
Why is Sole Proprietorship Business PAN Card Important?
A Permanent Account Number or PAN is an essential document all the taxpayers must have with them as has been obligated in the Income Tax Act, 1961. PAN card provides any individual or business that is generating income with his tax identity. If an individual is in business then PAN card holds a lot of importance in the business deal. If the person is operating in India then it is compulsory to have a business PAN card notwithstanding whether the incorporation of business is done in India or abroad.
The major purpose of a PAN requirement is to keep a track on tax obligation and prevent tax evasion. Any person without a PAN cannot enjoy the Government’s tax benefits and shall be liable to pay taxes at the maximum rate with the punishment as prescribed. Also, the Income Tax Department may possibly consider that the individual is concealing his financial transactions or hiding any other important information.
Therefore, it’s important for the sole proprietor to apply for his own PAN card for running his business. Moreover, just because he is running a sole proprietorship business, it is not mandatory for him to have a separate sole proprietor business PAN card for his firm.
What are the Documents Required to Apply for a Sole Proprietor Business PAN Card?
The sole proprietor does not need a separate PAN card for his proprietorship business firm because it is not a separate legal entity. But the sole proprietor can use his personal PAN card for the purpose of sole proprietorship business firm. Few of the documents required for PAN card application by the sole proprietor are given below:-
- Proof of identity (anyone having Driving License or Voter ID or Passport)
- Proof of address includes (anything such as Telephone Bill or Electricity Bill or Water bill or the Pension Payment Order)
- Proof of Birthdate (anyone from High School leaving certificate or pass certificate where the date of birth is present)
How to online Apply for a PAN Card for a Proprietorship Firm?
The PAN card of the owner can be used as the sole proprietor business PAN card of the proprietorship firm. The procedure to follow to apply for PAN card for the proprietorship firm is given as follows-
- Visit the NSDL websites and fill the PAN application online.
- From the ‘Application Type’ drop-down menu choose ‘Form 49A’ or ‘49A’. In addition to this the owner shall select the appropriate type of business from the drop-down menu ‘Category’. For the sole proprietorship business, the category selected shall be ‘individual’.
- The sole proprietor shall mention the name, birth date, the contact number, email ID, etc in the given spaces as asked. Then, by entering the Captcha code he can click on ‘Proceed’.
- There shall be a token number generated as a confirmation of successful registration with the NSDL page service. Then the owner shall select on the “Continue with PAN application form” button.
- The next page shall ask for submitting the digital e-KYC. Hence, in the next part of the form the owner shall enter his details as required.
- The next step shall necessitate the owner to provide with AO (Accounting Officer) Code. The code shall be provided from the NSDL website by selecting the ‘AO Code Search for PAN’ link. Then the owner shall go to the declaration section and document details by clicking on ‘next’.
- This stage will require the need to declare the documents that are being uploaded as proof of identity, birth date and address. The owner should also give a declaration that the information given is true to his knowledge and belief and shall select the ‘submit’ button.
- After filling all the details the owner shall be asked to review the errors in the application. After the review, if he is satisfied then he shall click on the ‘proceed’ button.
- In the next step he shall be directed to make payment for the requisite application fee. Moreover, he has the option to make the payment through debit/credit card, net banking and demand draft.
- After the payment he shall receive an acknowledgment receipt with a 16-digit number in his email id. Furthermore, with this number received on his mail he can verify & check the online status of his PAN card application at the website of NSDL.
- The owner will have to send the self-attested hard copies of the documents with the print of the online application form attached and with two passport-sized photos and the acknowledgment signed receipt to the PAN Services Unit of Income Tax at NSDL office, Pune.
It is important for the sole proprietor owner to ensure that the hard copy reaches the NSDL office within 15 days from the online application. The department shall examine the application and the associated documents. Thus, on being satisfied with the compliance they shall issue the PAN card within 15 business days.
Therefore, as there is no mandatory requirement of separate sole proprietor business PAN card, the owner shall use his own PAN card for the purpose of his business and shall use his own name for the same.