PAN Card for a Partnership Firm

Every partnership entity to transact in the monetary and taxation system and fulfills other financial responsibilities needs to obtain a Permanent Account Number (PAN) card in India. The Income Tax Department of India issued this 10-digit alphanumeric ID. It is vital for tracking financial activities and ensuring compliance with tax laws. Additionally, a PAN card is also used to prove the existence of the partnership firm.

Further, for legal obedience and efficient running, it is vital to know how to obtain a PAN card for a partnership firm. To know, read on the blog, and learn about the PAN for a partnership firm, its core components, documents, application process, and more.

Is PAN Mandatory for a Partnership Firm in India?

Yes, obtaining a PAN card is mandatory for a partnership firm in India. According to section 139A of the Income Tax Act, any entity that is liable to file a tax return in India should have a PAN card. Considering this, a partnership firm is also treated as a separate business taxable entity in India, so it should also obtain its own PAN card independent from its partners. Further, a PAN card for a partnership firm is mandatory in the following situations:

• Filing tax return in India (ITR-5)
• Applying for GST registration as GSTIN is PAN-based
• Opening a current bank account in the name of the firm
• Conducting high-value financial transactions
• Collecting or deducting TDS/ TCS
• Applying for loans or credit facilities
• Selling or purchasing immovable property

Moreover, even if the partnership firm has not started its operations or faces losses during the financial year, a PAN card is still required. Considering this, non-compliance with it can lead to consequences such as:

• Penalty under section 272B for failure to get or quote PAN.
• Under section 206AA higher TDS deduction of up to 20% if PAN is not submitted
• Financial transaction rejection due to KYC deficiencies.

It is vital to know that the personal PAN card of the partner cannot be used for firm transactions, as it may trigger legal complications and tax discrepancies.

Therefore, for seamless banking operations, regulatory recognition, and proper tax compliance, a PAN card for a partnership firm is mandatory. Now, moving ahead, let's know the formalities before Applying for a PAN card.

Formalities Before Applying for a PAN Card

Before applying for a PAN card for a partnership firm, the partners should first complete the following formalities:

• Duly notarize your partnership deed of the firm through a public notary.
• Define and provide responsibility to one partner to act as a manager and sign on behalf of the firm.
• Ensure that in the partnership deed, the formation date and place of business of the firms are stated.
• Certify that every partner and two additional witnesses have signed each page of the partnership deed.
• Using a rubber stamp, having the name of the partnership firm and the word "partner" stated on it, stamp the partnership deed.

These are some of the formalities that partners need to complete before applying for a PAN card for a partnership firm. Now, moving further, let's know the documents required for a partnership firm PAN card application in the next section.

Documents Required for a Partnership Firm PAN Card Application

Here is the list of documents a partnership firm's PAN card application requires:

• Partnership deed
• Digital Signature Certificate (DSC) of the authorized partner
• Identity proof of all partners
• Address proof of all partners
• Address proof of the office, such as a sale deed, a rental agreement, an NOC from the owner, or utility bills not older than 3 months
• Certificate of registration of the partnership firm
• Copy of PAN cards of all partners

These are the mandatory PAN card application documents required by the partnership firm to apply for a PAN. Moving forward, let's know the PAN card application process for a partnership firm.

PAN Card Application Process for a Partnership Firm

There are two ways in which the PAN card application process for a partnership firm can be done, i.e., online and offline. Further, let's know about each process of the PAN application in detail.

How to Apply PAN Card for Partnership Firms Online?

Here is how you can apply for a PAN card for a partnership firm online:

1. Step: Visit the official website of NSDL.
2. Step: Select the "New PAN- Indian Citizen (Form 49A) option from the drop-down list under the "Application Type" option on the page.
3. Step: From the drop-down list, under the "Category" option, select the "Firm" option.
4. Step: On the PAN card form 49A, fill out the requested details. It includes details of the partnership firm, contact details, business code, partnership firm income details, and documents on the application form.
5. Step: From the DD, cheque, net banking, and debit or credit card options, choose the payment mode and make the payment as per the mode of submission of your PAN card application documents.
6. Step: Once the payment process is complete, take a printout of the acknowledgement slip.
7. Step: On the acknowledgment slip, affix a recent passport-sized photograph of the authorized partner and attest it with a black pen.
8. Step: Within 15 days of the online PAN card application filing, send the acknowledgment slip with the stated documents to the mentioned address:
   • Income Tax PAN Services Unit, Protean eGov Technologies Limited, 4th Floor, Sapphire Chambers, Baner Road, Baner, Pune- 411045
9. Step: Once the PAN card application form for a partnership firm is verified, within 15-20 days, the PAN will be dispatched to the registered office of the firm.

How to Apply PAN Card for Partnership Firms Offline?

Follow the steps below to apply for a PAN card for a partnership firm offline:

1. Step: Visit your nearest PAN application centre (TIN-FC office) and get the PAN application form, i.e., Form 49A. Additionally, you can also download the application form from the TIN website.
2. Step: Using a black ball pen, fill out the PAN application form.
3. Step: The PAN application form should be signed by the authorized partner.
4. Step: After that, submit your PAN application form to the TIN-FC office along with the required documents and pay the applicable PAN card fees.
5. Step: Once the PAN application and documents are verified, within 15-20 working days at your registered office of the partnership firm, you will receive your PAN card. Additionally, with the acknowledgment number you receive after submitting your application, you can track down the PAN card status online.

This is how you can apply for a PAN card for a partnership firm online and offline. Now, moving ahead, let's know PAN cards for a partnership firm when an NRI is a partner.

PAN Card for a Partnership Firm: When an NRI is a Partner

It is a common query that generally arises when an NRI becomes a partner in an Indian partnership firm. A partnership firm still requires a PAN card even if there is an NRI partner in it. Considering this, the presence of an NRI partner does not alter or eliminate the requirement of obtaining a PAN card. However, certain additional considerations apply. These are as follows:

• PAN Card for a Partnership Firm Remains Mandatory
  • Regardless of whether the partnership firm has resident or NRI partners, it is mandatory for it to obtain its own PAN card.
  • The PAN card of the firm is independent and separate from the individual PAN cards of the partners. 
• Individual PAN Card of an NRI Partner If
  • The NRI partners earn income from the partnership firm.
  • TDS applies to the payments made to the NRI partner.
  • The partner received interest or remuneration from the firm.
• TDS on Payments to NRI Partners
  • If interest and remuneration are paid by the partnership firm to its NRI partner under section 195, tax may need to be deducted at source. It further depends on applicable tax treaty provisions and the nature of the payment.
• FEMA Considerations
  • If in an Indian partnership firm, an NRI is a partner, it is vital to follow the compliance stated under the Foreign Exchange Management Act (FEMA). Additionally, investment made by an NRI in the firm may require adherence to reporting norms and sectoral guidelines.

Therefore, while the requirement of having a PAN card for a partnership firm remains unchanged, the compliance structure becomes more nuanced when the firm involves an NRI as its partner. Moving further, let's know about the PAN card application form for partnership firms.

PAN Card Application Form for Partnership Firms

Here are the following details that partners need to fill in Form 49A to obtain a PAN card for a partnership firm:

• Under the "Category" option, choose "Firm."
• Mention the name of the firm as per the certificate of registration issued by the Registrar of firms with an M/S under the last name section of the applicant.
• Under the abbreviations of the name section, mention the name of the partnership firm as per the certificate of registration.
• In the date of birth section, enter the date of the partnership deed.
• Left the gender field, the details of parents field, and the Aadhaar card field blank.
• According to the partnership deed, mention the office address of the firm in the form.
• As provided in the certificate of registration, enter the firm's registration number.
• Under the "Source of Income" option, choose the "Income from business/ profession."
• Based on the business of your partnership firm, select the correct business code.
• Mention all the supporting documents that you are submitting as proof, along with your PAN application form/ acknowledgment slip (if form filled out online), to the Income Tax Department/ TIN-FC office.
• Mention the name of the authorized partner of the firm in the declaration section.
• The PAN card application form should be signed by the authorized partner.
• Additionally, attach the photograph of the authorized partner on the PAN application form. In case the form is filled offline, the partner should put his/her signature across the affixed photo attach on the top-left hand side of the PAN application form.

So, this is how partners can fill out the PAN card application form for a partnership firm. Moving forward, let's know the business code in the PAN application for a partnership firm.

Business Code in PAN Application

The table below states the business code for different business types required to be mentioned during the PAN card application form for a partnership firm:

These are the business codes according to your business type that you need to mention when applying for a PAN card for a partnership firm.

Final Thoughts

Lastly, a PAN card for a partnership firm in India is vital for partnership firms. It helps in determining the authenticity of the firm. Additionally, helps streamline financial transactions, tax filings, and other legal compliance. Apart from this, a partnership PAN card also helps in improving the transparency and credibility of the firm in business. However, before applying for a PAN card, partnerships should complete all the formalities stated above.

Furthermore, if you need any assistance in applying for a PAN card, connect with Savetaxs. We have a team of experts providing the best NRI PAN card services for many years. Our experts work around the clock to help NRIs with any PAN card issues, financial planning, tax matters, and more.