A Permanent Account Number or PAN will be generated automatically if an individual files the income tax return by quoting an Aadhaar number, the Central Board of Direct Taxes said in a notification on Monday. PAN is a 10-digit alphanumeric number issued by the I-T department to individuals and entities for filing tax returns.
While presenting the Budget for the current financial year in July this year, Finance Minister Nirmala Sitharaman had said that individuals would be able to file their tax returns using Aadhaar number issued by the Unique Identification Authority of India (UIDAI). Also, the government made the use of Aadhaar “interchangeably” with PAN under the income tax laws.Read more ↓
Here are 10 things to know about the latest Aadhaar PAN rules:
- According to the August 30 notification by the CBDT, the apex policymaking body for the Income Tax Department, a person not having a PAN who furnishes Aadhaar for filing an income tax return “shall be deemed” to have applied for allotment of PAN. Such persons will not be required to apply for a PAN or submit any more documents, according to the CBDT.
- The rule has come into effect from September 1, according to the CBDT.
- The tax department will “obtain demographic information of an individual from the Unique Identification Authority of India (UIDAI)” for allotment of Permanent Account Number (PAN), the notification added.
- In her Budget speech on July 5, Finance Minister Nirmala Sitharaman had announced that PAN and Aadhaar would be made “interchangeable” as the government would allow those not having a PAN to file I-T returns by simply quoting their Aadhaar number, and also use it wherever they are required to quote PAN.
- Aadhaar holds details such as name, date of birth, gender, photo, address and biometrics of individuals.
- A PAN is a 10-digit alphanumeric number allotted by the Income Tax Department to entities such as persons and firms.
- Over 120 crore Aadhaar numbers have been issued in the country and about 41 crore PANs generated.
- Out of these, more than 22 crore PANs are linked with Aadhaar.
- Currently, quoting of PAN is mandatory for cash transactions – such as hotel or foreign travel bills – exceeding Rs. 50,000.
- PAN is also mandatory on purchase of immovable property of over Rs. 10 lakh.