According to the latest data from the Income Tax department, almost half of Indians have a Permanent Account Number (PAN). It said that although there is still a difference in the number of male and female PAN holders, it is rapidly narrowing. 42.10 crore men and 31.05 crore women had PAN cards as of March 31, 2024. 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).
Over 74.67 crore PAN had been allotted as of March 31, 2024, according to the data, a 10% increase from the 67.67 crore recorded as of March 31, 2023. In addition, this number represents a sharp increase of roughly 2,500% over the 2.76 crore PANs that were issued as of March 31, 2014. Individuals made up between 97% and 98% of PAN holders, with a higher proportion of male than female holders. According to the data, male-female ratio is coming down. It was 1.96 in FY14. It was dropped to 1.69 at the end of FY19 and it was further dipped to 1.35 at the end of FY24.
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
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Reasons for rise in PAN holders
- The mandatory requirement of PAN in various financial transactions.
- To evaluate tax collected at source (TCS) or tax deducted at source (TDS), PAN is required.
- The Income-Tax Rules’ Rule 114(B) lists the eighteen categories of financial transactions for which providing a PAN is required.
- Tax department officials stated that an increase in the number of female investors contributed to the surge. The difference between men and women has decreased as a result.
- up to March 31, 2024, over 60.5 crore of the 74.67 crore PANs were linked to Aadhaar. The PAN-Aadhaar linkage helped in eliminating a significant 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.
- If PAN-Aadhaar is not linked, an individual is not entitled for income tax refunds.
According to section 139AA of the Income Tax Act, every person who is eligible for an Aadhaar number and has been assigned a Permanent Account Number (PAN) as of July 1, 2017, must notify Aadhaar in the format and way specified. Therefore, before the deadline, these individuals must obligingly link their Aadhaar and PAN.
The Central Board of Direct Taxes announced earlier this week 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 of this year, providing some relief to taxpayers with unlinked PAN and Aadhaar.
Read Also:How to link PAN with Aadhaar by May 31 to avoid Income Tax Notice?
Many individuals who work with taxpayers who did not connect Pan with Aadhar but did not deduct higher TDS will also find relief from this decision. According to the CBDT, if assessees link their PAN with Aadhaar by May 31, no action will be taken against them for short deduction of Tax Deducted at Source (TDS).
“Demands have been raised by the Department against the deductors/collectors while processing TDS/TCS statements under section 200A or under section 206CB of the Act, as the case may be, in such cases where the deduction/collection has not been made at a higher rate,” the CBDT stated in a recent circular.
The CBDT had declared that PANs unconnected to Aadhaar would stop working on July 1, 2023, following multiple extensions. The taxpayer would likewise be unable to use multiple services in such circumstances. In these circumstances, TDS and TCS would be withheld at a higher rate and pending income tax returns would not be issued. Those who link their PAN to Aadhaar after the deadline incur an additional Rs 1,000 late penalty.
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