The New Income Tax Bill 2025 introduces several important regulations related to PAN (Permanent Account Number) and Aadhaar, which will be mandatory for taxpayers to comply with. These measures are part of the government’s efforts to streamline tax administration and promote transparency through digital processes.
PAN and Aadhaar Linking Now Mandatory
According to the new Income Tax Act, it is now compulsory for all individuals who have been issued a PAN and are eligible to obtain an Aadhaar number to link the two. Failing to do so will result in the deactivation of the individual’s PAN. Once deactivated, the PAN will be unusable for various activities such as banking transactions, filing taxes, or any financial operations.
Using Aadhaar as an Alternative to PAN
For those who do not have a PAN, the Aadhaar number can be used as a temporary substitute. These individuals will later be assigned a PAN. Additionally, those who already have a PAN can use their Aadhaar number in place of their PAN, provided they have informed the Income Tax Department of their Aadhaar details.
Holding Multiple PANs is Illegal
The new regulations make it clear that individuals who already possess a PAN cannot apply for a second one. Holding more than one PAN is considered illegal and could result in severe penalties or legal consequences for the individual.
PAN or Aadhaar Mandatory for Key Financial Transactions
From now on, any person engaging in significant financial activities, such as opening a bank account, depositing over Rs 50,000 in cash, purchasing immovable property, or other major financial transactions, will be required to provide either their PAN or Aadhaar number. The relevant authority must ensure that the provided PAN or Aadhaar number is correctly authenticated.
Penalty for Failing to Link PAN with Aadhaar
If a person fails to link their PAN with Aadhaar within the specified timeframe, they may incur a financial penalty of up to Rs 1,000. Furthermore, failure to link may result in the deactivation of the PAN, potentially hindering the individual’s ability to carry out financial activities.
Severe Penalties for Providing Incorrect Information
Submitting incorrect Aadhaar or PAN details will attract a fine of Rs 10,000 per violation. In cases of tax evasion or fraudulent activities, more stringent legal actions could be taken, including severe penalties or legal prosecution.