The Income Tax (IT) department will automatically issue Permanent Account Number (PAN) to a taxpayer using Aadhaar number for filing returns as part of a new arrangement to link the 2 databases. According to a notification issued by the Central Board of Direct Taxes (CBDT) on Aug 30, a person who furnishes Aadhaar, as they do not have Permanent Account Number (PAN), "shall be deemed" to have applied for allotment of Permanent Account Number (PAN) & they will not be required to apply or submit any more documents.
The rule has come into effect from Sept 1, it said.
The notification said the tax department will "obtain demographic information of an individual from the Uunique Identification Authority of India (UIDAI)" for allotment of permanent account number (PAN), a 10-digit alphanumeric identifier issued by it.
The Central Board of Direct Taxes (CBDT) frames policy for the tax department.
Central Board of Direct Taxes (CBDT) chairman P C Mody had told in an interview in July that the department would "suo motu" allot a fresh permanent account number (PAN) to a person who files I-T returns (ITR) with only Aadhaar as part of a new arrangement to link the 2 databases.
"In cases where Aadhaar is being quoted & permanent account number (PAN) isn't there, we could possibly think on the terms of allotting a permanent account number (PAN) to the person (who is filing income tax return)."
"The law provides that the assessing officer can suo motu allot permanent account number (PAN). So, if Aadhaar is being quoted without permanent account number (PAN), I give him the permanent account number (PAN). It becomes linked," the Central Board of Direct Taxes (CBDT) chairman had said.
The Central Board of Direct Taxes (CBDT) chief was asked if the Income Tax (IT) department-issued permanent account number (PAN) will be dead after FM Nirmala Sitharaman in her Budget speech on July 5 announced that permanent account number (PAN) & Aadhaar are being made interchangeable as the govt will allow those who don't have permanent account number (PAN) to file I-T returns by simply quoting their Aadhaar number & use it wherever they are required to quote permanent account number (PAN).
Linking of the 2 databases is now compulsory & backed by law, the Central Board of Direct Taxes (CBDT) chief had said.
While Aadhaar is issued by Unique Identification Authority of India (UIDAI) to a resident, permanent account number (PAN) is a 10-digit alphanumeric number allotted by the tax department to a person, firm or entity.
Aadhaar holds all vital information of an individual such as name, date of birth, gender, photo & address, & also biometrics.
The same set of information is required to get a new permanent account number (PAN).
As per data, over 120 crore Aadhaar numbers have been issued in the country & about 41 crore permanent account number (PAN) numbers have been generated.
Out of these, more than 22 crore permanent account number (PAN)s are linked with Aadhaar.
Section 139 AA (2) of the I-T Act stipulates that every person having permanent account number (PAN) as on July 1, 2017, & eligible to obtain Aadhaar, must intimate their Aadhaar number to tax authorities.
After the SC upheld the section 139AA, the govt in March this year declared that the deadline for linking permanent account number (PAN)-Aadhaar was available till Sept 30.
The apex court, in Sept. last year, had declared the Centre's flagship Aadhaar scheme was constitutionally valid & held that the biometric ID would remain mandatory for filing of I-T returns (ITR) & allotment of permanent account number (PAN).
The latest notification said the tax department will be "responsible for evolving & implementing appropriate security, archival & retrieval policies in relation to furnishing or intimation or quoting or authentication of Aadhaar number or obtaining of demographic information of an individual from the Unique Identification Authority of India (UIDAI), for allotment of permanent account number (PAN) & issue thereof".
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