• UGI USER
  • May 29, 2024
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INCOME TAX DEPT MANDATES PAN-AADHAAR LINKING BY MAY 31 TO AVOID HIGHER TAX DEDUCTION

Why in the news?

  • The income tax department urges taxpayers to link PAN with Aadhaar by May 31.
  • Failure to link PAN with Aadhaar may result in tax deduction at a higher rate, as per income tax rules.
  • If PAN is not linked with Aadhaar, TDS is required to be deducted at double the applicable rate.
source:slideshare

About PAN-Aadhaar linking:

  • The Income Tax Department automates PAN issuance using Aadhaar for return filing.
  • Demographic data obtained from UIDAI eliminates the need for additional documents.
  • PAN serves as an identifier for all tax-related transactions, ensuring compliance.
  • Aadhaar’s comprehensive information simplifies the PAN application process.
  • Interchangeability of PAN and Aadhaar for tax filing, enhancing taxpayer convenience.
  • Objective is to enhance tax compliance and streamline taxpayer experience.
What is an Aadhaar ?

  • Aadhaar: 12-digit unique identification number issued by the Government of India.
  • Launched in 2009, includes fingerprints and iris scans, preventing fraud.
  • Serves as proof of identity and address.
  • Facilitates government services and financial transactions.
  • Managed by UIDAI, Aadhaar card contains personal information and biometric data.
  • Used for government welfare schemes, service delivery, and accepted as proof of address for stock market investments by SEBI.

About PAN Card:

  • Permanent Account Number (PAN) is an alphanumeric, 10-digit unique number assigned to taxpayers by the Income Tax Department.
  • Purpose: Tracks financial activities and required for all forms of payment.
  • Validity: PAN number is valid for life, unaffected by changes in address or job profile, and serves as proof of identity.