Finance Ministry is likely to removed the requirement of PAN card to give relief to the people, if Aadhaar is already available.
Reetu | Dec 23, 2022 |
Union Budget 2023: PAN likely to switch with Aadhaar for some Financial Transactions; Know Details
In the upcoming union budget 2023, the Finance Ministry is likely to remove the requirement of PAN card to give relief to the people. If the Aadhaar card is already available, then the requirement of PAN in money transactions (PAN Card For Transaction With Aadhaar Card) can be abolished. However, this will be done only for a few financial transactions.
The move is intended to streamline rules as requested by financial organisations and banks.
Banks have presented this proposal to the government. Banks say that since the accounts are linked to Aadhaar, there is no need for PAN. An official aware of the matter told that information in this regard has been received and they are being investigated and would be addressed during the budget.
According to Section 206AA of the Income Tax Act, financial transactions in which a PAN is not provided are now subject to a TDS of 20%, even if the applicable rate is lower.
The official said that some lenders have suggested amendment in the Income Tax Act, as some problems are also arising regarding loans from banks.
As per the banks, nearly all individual accounts are seeded with Aadhaar numbers. They also claim that Section 139A(5E) of the Income Tax Act permits users to provide an Aadhaar number rather of a PAN card for certain transactions.
According to an Economic Times report, the justification for eliminating the PAN requirement is that practically all bank accounts are currently connected with an Aadhaar number and are exempt from the PAN requirement under section 139A (SE) of the Income Tax Act. For some transactions, Aadhaar can be used instead of a PAN. According to the report, an official stated that the requirement of a PAN card may be eliminated for a limited time, implying that the requirement of a PAN card may be eliminated for specific transactions.
The clarification on the subject is likely to be helpful for those who are not required to have a PAN but may still be subject to larger tax deductions in certain transactions.
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