Taxpayers quoting Aadhaar numbers to file their income tax returns will be deemed to have applied for permanent account numbers from the Income Tax Department. As per an amendment to the income tax rules, those using Aadhaar for specified transactions would not have to furnish additional documents to receive their permanent account numbers (PAN). The changes come into effect from September 1.
In a notification dated August 30, the Central Board of Direct Taxes (CBDT) mentioned that "Any person... who has furnished or intimated or quoted his Aadhaar number in lieu of the permanent account number in accordance with sub-section (5E) of section 139A, shall be deemed to have applied for allotment of permanent account number and he shall not be required to apply or submit any documents under this rule".
The CBDT further mentioned that Aadhaar holders can also apply for allotment of PAN using their 12-digit biometric identification number. They would not be required to apply or submit any documents under this rule, the statement said.
The notification mentioned that CBDT would "obtain demographic information of an individual from the Unique Identification Authority of India (UIDAI)" for allotting PAN.
Presenting her maiden Budget earlier this year, Finance Minister Nirmala Sitharaman had introduced interchangeability of Aadhaar and PAN. In her Budget speech, the Finance Minister had proposed "to allow those who do not have PAN to file Income Tax returns by simply quoting their Aadhaar number and also use it wherever they are required to quote PAN".
Aadhaar is a 12-digit identification number, which holds the name, date of birth, gender, address, photo and biometric data of a resident of India. Meanwhile, PAN is a 10-digit alphanumeric number allotted by income tax department to an individual, firm or entity.
Available data shows that more than 120 crore Aadhaar numbers have been issued across India, whereas around 41 crore PANs have been allotted. Out of these, more than 22 crore PANs have been linked with Aadhaar.
Section 139 AA (2) of the I-T Act stipulates that every person having PAN as on July 1, 2017, and eligible to obtain Aadhaar, must intimate their Aadhaar number to tax authorities. After the Supreme Court upheld the section 139AA, the government in March this year declared that the deadline for linking PAN-Aadhaar was available till September 30.
The apex court, in September last year, had declared the Centre's flagship Aadhaar scheme was constitutionally valid and held that the biometric ID would remain mandatory for filing of I-T returns and allotment of PAN.
The latest notification said the tax department will be "responsible for evolving and implementing appropriate security, archival and 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 UIDAI, for allotment of permanent account number and issue thereof".
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