TDS on Proprietorship
This query is : Resolved
09 August 2009
If an individual issues a bill in the name of a proprietorship concern, can he furnish the PAN of the Individual (same PAN used for filing ITR 4) to the TDS deductor. For purpose of verification, the PAN will be in name of individual and not proprietorship concern. Will that create a problem in getting tax credit. The sections for TDS always classify deductees as Individual / HUF and other entities. Will the proprietorship be classified as Individual.
10 August 2009
yes, you can use the PAN of individual for the propretorship concern, there is no problem in geting credit of TDS from Income tax Dept.
10 August 2009
Agree
10 August 2009
Thanks. I have furnished this PAN to deductor last year also and my tax reflects in the Tax View of NSDL. However,I read notification regarding UTNS and the new challans had something about verification of name of PAN Holder. What will happen is that only my individual name will resolve and my proprietorship name will not be visible in my PAN number. What must a proprietor do in such circumstances if deductor will not be able to verify the Proprietorship name?
27 July 2025
You're asking an important and practical question regarding **TDS compliance and PAN usage in case of a proprietorship firm**.
Let’s clarify everything step by step.
---
## ✅ **Key Facts**:
* **Proprietorships are not separate legal entities**. The owner and the proprietorship are **treated as the same person** for income tax purposes.
* A **proprietorship does not get a separate PAN**. The **individual’s PAN** is used for all transactions of the proprietorship.
---
## ❓**Can a proprietor furnish their individual PAN for TDS purposes?**
### ✅ **Yes.**
* TDS **must be deducted and reported using the individual's PAN**, even if the bill is in the **name of the proprietorship**.
* For all legal and tax purposes, **TDS credit goes to the individual**, who is the **sole legal owner** of the proprietorship.
---
## 🔍 **About name mismatch / PAN verification concerns (UTN, NSDL, etc.)**
* The **TDS system (TRACES/NSDL)** verifies **only the PAN** and **the name associated with the PAN (as per ITD records)**.
* So when a deductor verifies the PAN, **only your individual name** will appear (e.g., "Ravi Kumar") and **not the business name** (e.g., "Ravi Kumar & Co.").
* This **does NOT cause any problem**, as long as:
* The **PAN is correct**
* The **individual files the return** (usually ITR-3 or ITR-4) and
* The **TDS is correctly credited in Form 26AS**
---
## 📝 What should a proprietor do if the deductor is concerned about the mismatch?
1. **Explain that the proprietorship has no separate PAN**, and the individual’s PAN is used.
2. Provide a **letter or declaration** (if required) clarifying:
> "This is to confirm that \[Proprietorship Name] is a proprietorship firm owned by \[Individual Name], and the PAN \[ABCDE1234F] belongs to the proprietor. Hence, the same PAN should be used for all TDS compliance."
3. **Enclose a copy of PAN card** and **GST registration** (if applicable) showing the link between the proprietor and the business name.
---
## 📌 Example:
| Particulars | Entry |
| ------------------------ | ------------------------------ |
| Proprietorship Name | M/s Star Enterprises |
| Owner Name | Anil Sharma |
| PAN | AQWPS1234K (Anil Sharma's PAN) |
| Invoice Issued By | M/s Star Enterprises |
| TDS Deducted Against PAN | AQWPS1234K (Anil Sharma) |
> When TDS is filed with PAN AQWPS1234K, **credit will reflect in Anil Sharma’s Form 26AS**, which is correct.
---
## ✅ Conclusion:
* **Yes, use the individual’s PAN.**
* No problem will occur in TDS credit if PAN is correct.
* Proprietorships are **treated as individuals** for TDS classification.
* If a deductor insists on seeing the proprietorship name in PAN records, you can explain the nature of proprietorships or provide supporting documentation.
Let me know if you want a **sample declaration letter** for such a situation.
Let’s clarify everything step by step.
---
## ✅ **Key Facts**:
* **Proprietorships are not separate legal entities**. The owner and the proprietorship are **treated as the same person** for income tax purposes.
* A **proprietorship does not get a separate PAN**. The **individual’s PAN** is used for all transactions of the proprietorship.
---
## ❓**Can a proprietor furnish their individual PAN for TDS purposes?**
### ✅ **Yes.**
* TDS **must be deducted and reported using the individual's PAN**, even if the bill is in the **name of the proprietorship**.
* For all legal and tax purposes, **TDS credit goes to the individual**, who is the **sole legal owner** of the proprietorship.
---
## 🔍 **About name mismatch / PAN verification concerns (UTN, NSDL, etc.)**
* The **TDS system (TRACES/NSDL)** verifies **only the PAN** and **the name associated with the PAN (as per ITD records)**.
* So when a deductor verifies the PAN, **only your individual name** will appear (e.g., "Ravi Kumar") and **not the business name** (e.g., "Ravi Kumar & Co.").
* This **does NOT cause any problem**, as long as:
* The **PAN is correct**
* The **individual files the return** (usually ITR-3 or ITR-4) and
* The **TDS is correctly credited in Form 26AS**
---
## 📝 What should a proprietor do if the deductor is concerned about the mismatch?
1. **Explain that the proprietorship has no separate PAN**, and the individual’s PAN is used.
2. Provide a **letter or declaration** (if required) clarifying:
> "This is to confirm that \[Proprietorship Name] is a proprietorship firm owned by \[Individual Name], and the PAN \[ABCDE1234F] belongs to the proprietor. Hence, the same PAN should be used for all TDS compliance."
3. **Enclose a copy of PAN card** and **GST registration** (if applicable) showing the link between the proprietor and the business name.
---
## 📌 Example:
| Particulars | Entry |
| ------------------------ | ------------------------------ |
| Proprietorship Name | M/s Star Enterprises |
| Owner Name | Anil Sharma |
| PAN | AQWPS1234K (Anil Sharma's PAN) |
| Invoice Issued By | M/s Star Enterprises |
| TDS Deducted Against PAN | AQWPS1234K (Anil Sharma) |
> When TDS is filed with PAN AQWPS1234K, **credit will reflect in Anil Sharma’s Form 26AS**, which is correct.
---
## ✅ Conclusion:
* **Yes, use the individual’s PAN.**
* No problem will occur in TDS credit if PAN is correct.
* Proprietorships are **treated as individuals** for TDS classification.
* If a deductor insists on seeing the proprietorship name in PAN records, you can explain the nature of proprietorships or provide supporting documentation.
Let me know if you want a **sample declaration letter** for such a situation.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- GST registration /aadion a new place of business in the same state and city
- Overtime income in salaried person case
- GTA (FCM & RCM) service in same GSTN registration with multiple business segment
- Preparation of PL BS and presentation in ITR
- RCM invoice related QRMP
- Regarding Trading & Investment in Shares and MF in the context of Income tax return
- Correction in filed Form 27Q - showing error due to deductee contact number
- Reporting sale value mismatch for share transaction
- AMENDMENT OF GSTR-1 B2B
- CSR Applicability FY 2425
- Credit Note entered twice
- Supporting document for trade name in GST
- Gst registration FY 2024-25
- Delay in filing Form 10 of a trust for asst year 23-24
- Form G for capital gain account closure
- "Please ensure that the Total of the Deductions u/s 54F match the same in Table D in Sch CG"
- Composition Dealer GST Annual Return Filing process
- GST ON COTTON TSHIRT EXPORT
- NEW LATEST AUDIT REPORT MEMO FORM -1 AND FORM -7 FOR AUDIT OF CO-OPERARIVE HOUSING SOCIETIES IN MA
- Stamp Duty & Registration Fees on Sale Deed
Trending Online Classes
-
Input Tax Credit, GST refunds and Recovery of refunds- Roadblocks and way outs
CA Nipun Arora03 September 2025 -
GST LIVE Certification Course - 43rd Weekdays Batch(With Govt Certificate)
Industry Expert15 September 2025
CAclubindia
