On February 13, 2025, Finance Minister Nirmala Sitharaman introduced the Income-Tax Bill 2025 (ITB) in Parliament, which will replace the 65-year-old Income Tax Act of 1961 (ITA) with a new Income Tax Act for 2025.
The bill simplifies regulations regarding the Permanent Account Number (PAN) and Aadhaar, which may benefit taxpayers. This article examines these new rules.
The PAN is a unique 10-digit alphanumeric identifier for individuals and entities, functioning as a national identity card necessary for financial transactions, including tax payments and income tax return (ITR) filings. There are fees associated with applying for or modifying a PAN card.
What are the Fees for PAN Card 2025?
Fees for obtaining or updating a PAN card vary based on whether a physical card is needed and the application submission method.
When is Quoting Aadhaar Mandatory?
Under the new bill, individuals eligible for an Aadhaar number must provide it when applying for a PAN and in their ITR. The bill mandates that “Every person who is eligible to obtain an Aadhaar number shall quote such number in the application form for allotment of Permanent Account Number and in the return of income.”
Those with a PAN who are eligible for an Aadhaar number must notify the income tax authority of their Aadhaar number as specified by the tax department.
Failure to provide the Aadhaar number will result in the PAN becoming inoperative.
When is Quoting PAN Mandatory?
All individuals must include their PAN in income tax returns, correspondence with any income tax authority, and payment challans for amounts owed under the Income Tax Act 2025.
Who is required to get a PAN?
According to recent legislation, anybody who fit any of the following requirements must apply for a PAN:
- In any given tax year, their total income or the total income of another assessed individual surpasses the basic exemption ceiling.
- In any given tax year, their total sales, turnover, or gross earnings from their business or profession exceed ₹5 lakh.
- For every tax year, they have to submit an income tax return in accordance with section 263.
- They are a resident entity that, excluding individuals, transacts at least ₹2.5 lakh in a tax year.
- They hold a significant role (e.g., managing director, partner, trustee) in the entity mentioned in point 4 or are authorized to act on its behalf.
Additionally, individuals cannot apply for or possess more than one PAN if they already have one.
(Newsroom staff only edited this story for style from a syndicated feed)
