Introduction

Self-employed professionals such as doctors, lawyers, architects, consultants, and freelancers are required to declare their income and pay taxes under the Income Tax Act. The Permanent Account Number (PAN) plays a central role in identifying the professional, linking their income to the tax system, and enabling the government to monitor tax compliance. With PAN, the income tax return (ITR) filing process becomes structured, traceable, and compliant with Indian tax regulations. Professionals can use either the regular taxation method or opt for presumptive taxation under Section 44ADA, depending on their eligibility.

1. PAN as the Primary Tax Identifier

Every professional must have a valid PAN to file income tax returns. PAN serves as the taxpayer’s identity and is mandatory for registering on the e-filing portal, tracking income, claiming TDS credits, and communicating with the Income Tax Department. Without PAN, filing an ITR is not possible.

2. Registering on the Income Tax Portal

Professionals must register on the Income Tax e-Filing websiteusing their PAN, which acts as the user ID. Once registered, they can log in to access pre-filled forms, view Form 26AS and AIS, file returns, pay taxes, and track refund status.

3. Selecting the Applicable ITR Form

For professionals not opting for presumptive taxation, ITR-3 is applicable. Those eligible and choosing presumptive taxation under Section 44ADA can use ITR-4. The correct form must be selected based on the nature and amount of professional income.

4. Reporting Professional Income

Professional income must be declared under “Income from Business or Profession.” The taxpayer must report gross receipts, total expenses, and net income. If opting for presumptive taxation, 50% of gross receipts are considered as income, and no expense details are required.

5. TDS and PAN-Based Credit Claims

Clients who deduct TDS from payments made to the professional will report the deductions against the professional’s PAN. These deductions appear in Form 26AS. The professional must ensure these credits are claimed properly in the ITR to avoid paying tax again.

6. Declaring Business Expenses and Deductions

Professionals who opt for regular taxation can claim deductions on expenses such as rent, utilities, travel, staff salary, and software subscriptions. All expenses must be supported by valid invoices and matched with PAN-linked bank accounts for audit purposes.

7. Payment of Advance Tax

If the total tax liability in a financial year exceeds ₹10,000, professionals must pay advance tax in four installments. PAN must be quoted while paying these taxes through the tax payment portal (TIN NSDL), and the payment details must be included in the ITR.

8. Using PAN for Presumptive Taxation under 44ADA

Professionals with gross receipts up to ₹50 lakhs can opt for presumptive taxation under Section 44ADA. PAN ensures that the professional’s eligibility is verified, and the 50% deemed income is correctly computed and reported without the need to maintain detailed books.

9. Verifying and Submitting the ITR

After filling out the return and validating all income, deductions, and taxes paid, the professional must e-verify the return. Verification can be done using Aadhaar OTP, net banking, or DSC, all linked to PAN. Without verification, the return is not treated as filed.

10. Maintaining PAN-Linked Records

Professionals must retain all invoices, receipts, and tax payment proofs linked with their PAN. These records are useful in case of scrutiny, refund queries, or legal compliance. Maintaining clear and organized financial records simplifies tax planning and protects against audits.

Conclusion

The PAN is indispensable for professionals in managing their tax responsibilities. It links income, deductions, and payments across all platforms, ensuring a transparent and accountable tax filing process. By selecting the right ITR form, claiming eligible credits, and accurately reporting income, professionals can comply with the law while optimizing their tax liabilities. Filing returns with PAN not only helps avoid penalties but also builds financial credibility and trust. Adopting a disciplined approach using PAN is essential for every professional who seeks long-term growth and compliance in India’s taxation framework.

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