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IT Dept to issue PAN automatically if taxpayers use Aadhaar for filing returns

Soon, the Income Tax Department will automatically issue PAN taxpayers who use their Aadhaar number for filing income tax returns. It may be noted that PAN-Aadhaar interchangeability was announced in
Union Budget 2019 as part of a new arrangement to link the two databases.

According to a notification issued by Central Board of Direct Taxes (CBDT) on August 30, a person who furnishes Aadhaar, as they do not have PAN, shall be deemed to have applied for PAN allotment and will not be required to apply or submit any more documents. This new rule came into effect from September 1.

The notification clearly stated, "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 notification also stated that the tax department will obtain demographic information of an individual from the Unique Identification Authority of India (UIDAI) for allotment of PAN. PAN is a ten-digit alphanumeric identifier issued by Income Tax Department of India.

After the Budget presentation in July, CBDT chairman PC Mody had said in an interview that the taxman will "suo motu" allot fresh PAN cards to people who file income tax returns using Aadhaar information. The statement came after the Budget proposed that only the biometric ID is enough for tax purposes.

"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," he had said.

It is worth mentioning that linking PAN and Aadhaar is compulsory and is backed by law. While Aadhaar is issued by UIDAI, PAN is allotted by the tax department to a person, firm or entity. Aadhaar is an important identity proof which 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.

The notification further stated that 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.

For information, as per Section 139 AA (2) of the Income Tax Act, 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 declared earlier this year in March that the deadline for linking PAN-Aadhaar is September 30.

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