Introduction
Section 2(23)(i) of the Income-tax Act, 1961 takes the meaning of the “firm " from Indian Partnership Act, 1932. Section 4 of the Indian Partnership Act, 1932 defines firm as under:
“Persons who have entered into partnership with one another are called individually "partners" and collectively "a firm", and the name under which their business is carried on is called the "firm name".
The firm shall include a limited liability partnership as defined in the Limited Liability Partnership Act, 2008. Section 2(1)(n) of the Limited Liability Partnership Act, 2008 defines “limited liability partnership” as a partnership formed and registered under the Act.
- What is PAN?
- Who has to obtain PAN?
- Every person who is carrying on any business or profession whose total sale, turnover, or gross receipts are or is likely to exceed five lakh rupees in any previous year
- Every person who intends to enter into specified financial transactions in which quoting of PAN is mandatory
- Every person if his total income or the total income of any other person in respect of which he is assessable during the previous year exceeds the maximum amount which is not chargeable to tax.
- A charitable trust who is required to furnish return under Section 139(4A)
- Every person who is carrying on any business or profession whose total sale, turnover, or gross receipts are or is likely to exceed five lakh rupees in any previous year
- Every importer/exporter who is required to obtain Import Export code
- Every person who intends to enter into specified financial transactions in which quoting of PAN is mandatory
- A person not covered in any of the above can voluntarily apply for PAN.
- Every non-individual resident persons and persons associated with them shall apply for PAN if the financial transaction entered into by them during the financial year exceeds Rs. 2,50,000.
- How to apply for PAN?
- What are the charges for obtaining a PAN?
- Documents and information to be submitted with PAN application?
- Copy of Certificate of Registration issued in the country where the applicant is located, duly attested by “Apostille” (in respect of the countries which are signatories to the Hague Apostille Convention of 1961) or by the Indian Embassy or High Commission or Consulate in the country where the applicant is located or authorised officials of overseas branches of Scheduled Banks registered in India
- Copy of registration certificate issued in India or of approval granted to set up office in India by Indian Authorities.
- Track Status
- Contact Assistance
- FAQs
What is PAN?
PAN stands for Permanent Account Number. PAN is a ten-digit unique alphanumeric number issued by the Income Tax Department. PAN is issued in the form of a laminated plastic card (commonly known as PAN card). Given below is an illustrative PAN: ALWFG5809L
The fourth character of PAN represents the status of the PAN holder. A partnership firm is represented by the character ‘F’ (e.g. ALWFG5809L).
Who has to obtain PAN?
PAN is to be obtained by following persons:
PAN is to be obtained by following persons:
How to apply for PAN?
1) Online Application - An online application can be made from the website of UTIITSL or Protean (formerly NSDL eGov)
2) Through PAN Application Center - Application for PAN can be submitted at the
PAN Application center
(a) Protean (formerly NSDL eGov) (b) UTITSL
What are the charges for obtaining a PAN?
The charges for applying for PAN is Rs. 110 (Application fee Rs. 93 + 18% GST) for Indian communication address and Rs. 1020 (including GST) for foreign communication address.
Documents and information to be submitted with PAN application?
A partnership firm registered in India shall submit a copy of Certificate of Registration issued by the Registrar of Firms or Copy of partnership deed along with the PAN application form.
In case a partnership firm is formed outside India, it shall submit the following documents along with PAN application form:
Track Status
Applicant will receive an acknowledgment containing a unique number on acceptance of the application form. This acknowledgement number can be used for tracking the status ( Protean (formerly NSDL eGov) / UTITSL ) of the application by using the track status facility available at above web sites.
Contact Assistance
The Income Tax Department or Protean (formerly NSDL eGov) or UTIITSL can be contacted in any of the following means
| Mode | Income Tax Department | Protean (formerly NSDL eGov) | UTITSL |
| Website | www.incometaxindia.gov.in | https://www.protean-tinpan.com/ | www.utiitsl.com |
| Call Center | 08069708080 | ||
| Email ID | tininfo@proteantech.in | ||
| Address | Protean (formerly NSDL eGov) INCOME TAX PAN SERVICES UNIT (Managed by Protean eGov Technologies Limited, 4th floor, Sapphire Chambers, Baner Road, Baner, Pune - 411045 |
UTI Infrastructure Technology And Services Limited, Plot No.3, Sector 11, CBD Belapur Navi Mumbai PIN - 400614 |
If your PAN card is lost?
If the PAN card is lost then you can apply for duplicate PAN card by submitting the Form for "Request for New PAN Card or/ and Changes or Correction in PAN Data" and a copy of FIR may be submitted along with the form.
If the PAN card is lost and you don't remember your PAN, then in such a case, you can know your PAN by using the facility of "Know Your PAN" provided by the Income Tax Department. This facility can be availed of from the website of Income Tax Department - www.incometaxindia.gov.in
You can know your PAN online by providing the core details like Name, Father's Name and Date of Birth. After knowing the PAN you can apply for duplicate PAN card by submitting the "Request For New PAN Card Or/ And Changes Or Correction in PAN Data".
What are the benefits of obtaining a PAN Card?
A Permanent Account Number has been made compulsory for every transaction with the Income-tax Department. It is also mandatory for numerous other financial transactions such as opening of bank accounts, availing of institutional financial credits, purchase of high-end consumer items, foreign travel, transaction of immovable properties, dealing in securities, etc. A PAN card is a valuable means of photo identification accepted by all Government and non-Government institutions in the country.
Is it mandatory to provide the Assessing Officer Code in Form 49A/49AA?
Yes, it mandatory to provide the Assessing Officer (AO) Code in Form 49A/49AA. AO Code (i.e. Area Code, AO Type, Range Code and AO Number) of the Jurisdictional Assessing Officer must be filled up by the applicant. These details can be obtained from the Income Tax Office or PAN Centre or websites of PAN service providers on www.utiitsl.com or www.tin-nsdl.com.
What is the penalty for not complying with the provisions relating to PAN?
Section 272B provides for penalty in case of default by the taxpayer in complying with the provisions relating to PAN, i.e., not obtaining PAN, even though he is liable to obtain PAN or knowingly quoting incorrect PAN in any prescribed document in which PAN is to be quoted or intimating incorrect PAN to the person deducing tax or person collecting tax. Penalty under section 272B is Rs. 10,000.
Can a person hold more than one PAN?
A person cannot hold more than one PAN. If a PAN is allotted to a person, then he cannot apply for obtaining another PAN. A penalty of Rs. 10,000/- is liable to be imposed under Section 272B of the Income-tax Act, 1961 for having more than one PAN.
If a person has been allotted more than one PAN then he should immediately surrender the additional PAN card(s).
Is it mandatory to provide Aadhaar number in PAN application form?
It is mandatory to quote Aadhaar number in the PAN application form for every person who is eligible to obtain Aadhaar Number.
In case the person doesnot posses the Aadhaar number, the enrolment ID of Aadhaar form can be quoted.
Note: W.e.f. 01-10-2024, the benefit of quoting enrolment ID of Aadhaar form has been withdrawn. The taxpayer is required to quote his Aadhaar number in PAN application Form.
View all Frequently Asked Questions- Income from House Property
- The house property should consist of any building or land appurtenant thereto;
- The taxpayer should be the owner of the property;
- The house property should not be used for the purpose of business or profession carried on by the taxpayer.
- Profits and Gains from Business and Profession
- Profit and gains from any business or profession carried on by the assessee at any time during the previous year
- Any compensation or other payment due to or received by any specified person
- Income under the Capital Gains
- There should be a capital asset. In other words, the asset transferred should be a capital asset on the date of transfer;
- It should be transferred by the taxpayer during the previous year;
- There should be profits or gain as a result of transfer
- Income from Other Sources
Income from House Property
Conditions for Taxability
Profits and Gains from Business and Profession
The following incomes are chargeable to tax under the head Profit and Gains from Business or Profession:
Income under the Capital Gains
Conditions for Chargeability:
Income from Other Sources
Any income which is not chargeable to tax under any other heads of income and which is not to be excluded from the total income shall be chargeable to tax as residuary income under the head “Income from Other Sources”.
- Steps to fill form 26QB
- Log on to website e-filing portal ( https://www.incometax.gov.in/iec/foportal/ ).
- Under 'e-file', click on 'e-Pay tax'
- Then Click on ‘New Payment’
- Select ‘Proceed’ under ‘26 QB (TDS on Sale of Property)’ field
- Fill the complete form as applicable.
(User should be ready with the following information while filling the form 26QB :
- Residential Status of seller
- PAN of the seller & buyer
- Communication details of seller & buyer
- Property details
- Amount paid/credited & tax details
- After submitting, the next page will ask to select the mode of payment i.e.,:
- Net banking;
- Debit Card;
- Pay at Bank counter;
- RTGS/NEFT; or
- Payment Gateway.
- Select the appropriate payment mode and click on continue to make the payment.
- On successful payment a challan counterfoil will be displayed containing CIN, payment details and bank name through which e-payment has been made. This counterfoil is proof of payment being made.
- Steps to Download Form 16B
- Register & login on TRACES portal (https://contents.tdscpc.gov.in/) as taxpayer using your PAN.
- Select "Form 16B (For Buyer)" under "Downloads" menu.
- Enter the details pertaining to the property transaction for which Form 16B is to be requested. Enter the Form Type, Assessment Year, Acknowledgment Number, PAN of Seller and click on "Proceed".
- A confirmation screen will appear. Click on "Submit Request" to proceed.
- A success message on submission of download request will appear. Please note the request number to search for the download request.
- Click on "Requested Downloads" to download the requested files.
- Search for the request with request number. Select the request row and click on "HTTP download" button.
I. Steps to fill form 26QB :
II. Steps to Download Form 16B:
Click here to go 'TDS on Sale of Property' page at TRACES Website
- What is the tax rate?
- How to pay tax?
- FAQs
What is the tax rate?
a) Income-tax:
A firm is liable to pay tax at the flat rate of 30% on its total income.
Surcharge: The amount of income-tax (as computed above) shall be further increased by a surcharge at the rate of 12% of such tax, where total income exceeds one crore rupees. However, the surcharge shall be subject to marginal relief (the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees).
Health and education cess: The amount of income-tax and the applicable surcharge, shall be further increased by education cess and secondary and higher education cess calculated at the rate of four per cent respectively of such income-tax and surcharge.
b) Alternate Minimum Tax:Tax payable by a firm cannot be less than 18.5 per cent (increased by Surcharge and HEC) of "adjusted total income" as per section 115JC.
How to pay tax?
Taxes can be paid in any of following mode:
1) Physical Mode- Payment by furnishing the hard copy of the challan at the designated bank
2) e-payment mode i.e. making payment by using the electronic mode
Who is supposed to pay Advance Tax?
Every person whose estimated tax liability for the year is Rs. 10,000 or more is liable to pay advance tax. However, a resident senior citizen (i.e., an individual of the age of 60 years or above during the relevant financial year) not having any income from business or profession is not liable to pay advance tax.
How is advance tax calculated and paid?
Advance tax is to be calculated on the basis of expected tax liability of the year. Advance tax is to be paid in instalments as given below:
| Status | By 15th June | By 15th September | By 15th December | By 15th March |
| Taxpayers (other than those who opted for presumptive taxation scheme of section 44AD) | Upto 15% of advance tax | Upto 45% of advance tax | Upto 75% of advance tax | Upto 100% of advance tax |
| Taxpayers who opted for presumptive taxation scheme of section 44AD | Nil | Nil | Nil | Upto 100% of advance tax |
Any tax paid till 31st March is treated as advance tax.
The deposit of advance tax is made through challan ITNS 280 by ticking the relevant column, i.e., advance tax.
Note:
E-payment is mandatory for a firm who is liable to get its accounts audited under section 44AB of the Income-tax Act, 1961.
- Is it mandatory to file return of income?
- Which form shall be used to file return of income?
- Is e-Filing of return is mandatory?
- FAQs
Is it mandatory to file return of income?
Yes, it is mandatory for every partnership firm to file the return of income irrespective of amount of income or loss.
Which form shall be used to file return of income?
A firm can file its return of income in ITR 5.
| ITR | Description | |
| ITR 4 | For Individuals, HUFs and Firms (other than LLP) being a resident having total income upto Rs.50 lakh and having income from business and profession which is computed under sections 44AD, 44ADA or 44AE and having long-term capital gains under section 112A upto Rs. 1.25 lakh. | |
| ITR 5 | For persons other than- (i) individual, (ii) HUF, (iii) company and (iv) person filing Form ITR-7 |
Is e-Filing of return is mandatory?
It is mandatory for a firm to file return of income electronically with or without digital signature. A partnership firm may also file return of income under Electronic Verification Code. However, a firm liable to get its accounts audited under section 44AB shall furnish the return electronically under digital signature.
Due dates for filing of return?
The due dates for filing of return by a partnership firm are as follows:
| Particulars | Due Dates |
| A firm who is required to get its accounts audited under the Income-tax Act or under any other law | October 31 of the assessment year |
| A firm who is required to furnish a report in Form No. 3CEB under section 92E | November 30 of the assessment year |
| In any other case | July 31 of the assessment year |
- View Refund/Demand Status
- Login to e-Filing website with User ID, Password.
- Go to Pending Actions and click on ".
- Response to Outstanding Demand
- How to Request for Refund Re-issue (in case of refund failure)
- Login to e-Filing website with User ID, Password.
- Go to Services and click on "Refund Reissue ".
- Create Refund Reissue request
View Refund/Demand Status
To view Refund/Demand Status, please follow the below steps:
How to Request for Refund Re-issue (in case of refund failure)
To request for Refund Re-issue, please follow the below steps:
Appeals
Income tax liability is determined by the Assessing Officer first. A tax payer aggrieved by various actions of Assessing Officer can appeal before Commissioner of Income Tax (Appeals). Further appeal can be preferred before the Income Tax Appellate Tribunal. On substantial question of law, further appeal can be filed before the High Court and even to the Supreme Court. Various appellate procedures at different levels of appellate authority are defined hereunder:
- How much remuneration or interest can be paid to a partner?
-
On first Rs. 6 Lakhs of book profit or in case of loss - Rs. 3,00,000 or 90% of book profit, whichever is more;
-
On the balance of the book profit - 60% of book profit.
- Deductibility of salary or interest paid to partner?
-
On first Rs. 6 Lakhs of book profit or in case of loss - Rs. 3,00,000 or 90% of book profit, whichever is more;
-
On the balance of the book profit - 60% of book profit
How much remuneration or interest can be paid to a partner?
a) Interest payable to partners shall be in accordance with the terms of the partnership deed, however, it shall not exceed 12% per annum.
b) Remuneration payable to partners shall be in accordance with the terms of the partnership deed, however, it shall not exceed the following limit:
Deductibility of salary or interest paid to partner?
Following sum paid by a partnership firm to its partners shall not be allowed as deduction to such firm:
1) Salary, bonus, commission or remuneration paid to non-working partners;
2) Remuneration or interest paid to the partners which are not in accordance with the terms of the partnership deed;
3) If remuneration or interest paid to the partners are in accordance with the terms of the partnership deed but they relate to any period prior to the date of the partnership deed;
4) Interest paid to partners is in accordance with the terms of the partnership deed but it exceeds 12% per annum;
5) Remuneration paid to partners is in accordance with the terms of the partnership deed but it exceeds the following permissible limit:
Note:
‘Book profit’ means the net profit computed under the head ‘Business or Profession’ as increased by the aggregate amount of the remuneration paid or payable to all the partners of the firm if such amount has been deducted while computing the net profit