Latest Income Tax department data shows that nearly half of India’s population have got Permanent Account Number (PAN). It stated that the gap between the number of male and female PAN holders still exists, but it is fast closing. As on March 31, 2024, 42.10 crore males have PAN cards vs 31.05 crore females, a report in Hindu Businessline said.
The data further stated that over 14 crore PANs are facing the threat of becoming in-operative as they have not been linked with Aadhaar (as on March 31).
As of March 31, 2024, the data showed that over 74.67 crore PAN have been allocated, representing a 10% increase from the 67.67 crore recorded as of March 31, 2023. This figure also marks a dramatic escalation of approximately 2,500% from the 2.76 crore PANs issued as of March 31, 2014. Nearly 97-98 per cent of PAN holders were individuals and the number of male holders was higher than that of female holders.
Permanent Account Number or PAN is a means of identifying various taxpayers in the country. Pan Card is a 10-digit unique identification alphanumeric number (containing both alphabets and numbers) assigned to Indians, mostly to those who pay tax.
Reasons for rise in PAN holders
> The mandatory requirement of PAN in various financial transactions.
> PAN is necessary to analyse tax deducted at source (TDS) or tax collected at source (TCS).
> Rule 114(B) of the Income-Tax Rules prescribes 18 types of financial transactions where quoting PAN is mandatory.
> Tax department officials said the surge also due to rise in the number of female investors. That is why the gap between male and female has come down.
> Of 74.67 crore PANs, over 60.5 crore have been linked with Aadhaar till March 31, 2024. The mandatory PAN-Aadhaar linkage helped in weeding out large number of duplicate PANs.
> After many extensions, June 30, 2023 was set as the last date for linking and from July 1, any such unlinked PAN became ‘inoperative’. However, such a PAN can be made ‘operative’ by paying a late fee of Rs 1,000.
Last year, the Central Board of Direct Taxes (CBDT) stated that about 11.5 crore PAN cards were deactivated in total as they weren’t linked to Aadhaar cards before the deadline. In a written reply to the Lok Sabha, Minister of State for Finance Pankaj Chaudhary had said that the government had collected Rs 601.97 crore from July 1, 2023 to January 31,2024 as penalty for late linking of PAN and Aadhaar.
The section 139AA of the Income Tax Act provides that every individual who has been allotted a Permanent Account Number (PAN) as of the 1st day of July 2017, and who is eligible to obtain an Aadhaar number, shall intimate Aadhaar number in the prescribed form and manner. That being said, such persons have to mandatorily link their Aadhaar and PAN before the scheduled deadline.
Earlier this week, the Central Board of Direct Taxes, offering some relief to taxpayers with unlinked PAN and Aadhaar, has said that TDS or TCS will not be deducted at a higher rate for transactions up to March 31, 2024, and where the PAN becomes operative by May 31 this year.
This decision comes as a relief also for many people dealing with taxpayers who didn’t link Pan with Aadhar but didn’t deduct higher TDS. CBDT has stated that no action will be taken against deductees of TDS for short deduction of Tax Deducted at Source (TDS) if assessees link their PAN with Aadhaar by May 31.
“In such cases, as the deduction/collection has not been made at a higher rate, demands have been raised by the Department against the deductors/collectors while processing of TDS/TCS statements under section 200A or under section 206CB of the Act, as the case maybe,” the CBDT said in a recent circular.
After giving several extensions, the CBDT had said that PANs not linked to Aadhaar would become inoperative from July 1, 2023. In such cases, the taxpayer would also not be able to use several services. Pending income tax returns would also not be issued and TDS and TCS would be deducted at a higher rate in these cases. A late penalty of Rs 1,000 is also levied on persons who link their PAN with Aadhaar post the deadline.