Taxpayer Using Aadhaar To File IT-Returns Will Be Issued PAN Automatically: CBDT

The Income Tax Department will automatically issue PAN to a taxpayer using Aadhaar number for filing returns as part of a new arrangement to link the two databases. According to a notification issued by the CBDT on August 30, a person who furnishes Aadhaar, as they do not have PAN, "shall be deemed" to have applied for allotment of PAN and they will not be required to apply or submit any more documents. The rule has come into effect from September 1, it said.

The notification said 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), a ten-digit alphanumeric identifier issued by it.

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The Central Board of Direct Taxes (CBDT) frames policy for the tax department. CBDT chairman PC Mody had told PTI in an interview in July that the department would "suo motu" allot a fresh PAN to a person who files I-T Returns (ITR) with only Aadhaar as part of a new arrangement to link the two databases.

"In cases where Aadhaar is being quoted and PAN is not there, we could possibly think on the terms of allotting a PAN to the person (who is filing income tax return). The law provides that the assessing officer can suo motu allot PAN. So, if Aadhaar is being quoted without PAN, I give him the PAN. It becomes linked," Mody added.

Mody was asked if the Income Tax Department-issued PAN will be dead after Finance Minister Nirmala Sitharaman in her Budget speech on July 5 announced that PAN and Aadhaar are being made interchangeable as the government will allow those who do not have PAN to file I-T returns by simply quoting their Aadhaar number and use it wherever they are required to quote PAN. Linking of the two databases is now compulsory and backed by law, the CBDT chief had said.

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While Aadhaar is issued by UIDAI to a resident, 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 and address, and also biometrics.  The same set of information is required to get a new PAN.

As per data, over 120 crore Aadhaar numbers have been issued in the country and about 41 crore PAN numbers have been generated. Out of these, more than 22 crore PANs are 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 top 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.

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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".

HIGHLIGHTS

• Person who furnishes Aadhaar, will be issued PAN without any document.
• Linking of Aadhar and PAN is now compulsory and backed by law.
• The deadline for linking PAN-Aadhaar is September 30, 2019.