PAN ownership gap shrinks, with 42.10 crore males and 31.05 crore females holding cards

PAN ownership soars: As much as half of India's population now possesses a Permanent Account Number (PAN), marking a milestone in tax identification. The gender gap in PAN ownership is gradually narrowing, with 42.10 crore males and 31.05 crore females holding PAN cards as of March 31, 2024.

As of the same date, a total of 74.67 crore PANs have been issued, reflecting a 10 per cent increase from the previous year and an astonishing 2,500 per cent surge since 2014. The surge in PAN issuance can be attributed to various factors, including the mandatory requirement of PAN in financial transactions, the need for analysing tax deductions, and the enforcement of Rule 114(B) mandating PAN in 18 types of financial transactions.

Aadhaar linking reduces duplicates

Additionally, the rise in female investors has contributed to closing the gender gap in PAN ownership. Over 60.5 crore PANs have been linked with Aadhaar by March 31, 2024, aiding in eliminating duplicate PANs. The government's initiative to deactivate unlinked PANs has resulted in penalties being collected amounting to Rs 601.97 crore from July 1, 2023, to January 31, 2024.

Section 139AA of the Income Tax Act mandates that individuals who were allotted a PAN by July 1, 2017, and are eligible for an Aadhaar number, must link their Aadhaar with PAN before the prescribed deadline. This requirement ensures compliance with tax regulations and facilitates seamless identification of taxpayers.

PAN-Aadhaar deadline relief

In a recent development, the Central Board of Direct Taxes (CBDT) provided relief to taxpayers facing challenges in linking their PAN with Aadhaar. They announced that transactions up to March 31, 2024, will not incur higher rates of Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) if the PAN becomes operative by May 31 of the same year.

This decision alleviates concerns for taxpayers and those handling their transactions, especially regarding TDS deductions. CBDT has clarified that individuals who link their PAN with Aadhaar by May 31 will not face any repercussions for short deduction of TDS.