The Union Budget 2024, presented on July 23, 2024, brought about a significant change in the Aadhaar system. This change pertains to replacing the Aadhaar Enrolment ID with the Aadhaar number, aiming to simplify linking the Aadhaar with the Permanent Account Number (PAN) and filing income tax returns.
This article provides a detailed overview of this change, its reasons, the proposed amendments, and its implications for taxpayers. Let’s delve into the specifics.
Contents
Budget 2024 New Rules For IT Return and Aadhar Pan Application
Under the existing framework of section 139AA of the Income-tax Act, individuals who are eligible to obtain an Aadhaar number are required to adhere to the following stipulations:
- Application for PAN: Every individual must include their Aadhaar number in the application form when applying for a Permanent Account Number (PAN).
- Filing of Income Tax Return: Every individual must include their Aadhaar number when filing their income tax returns.
- For individuals who have applied for an Aadhaar number but have not yet received it, the current provisions allow them to quote the Aadhaar Enrolment ID (EID) from their Aadhaar application form in their PAN application or income tax return.
The Rationale Behind the Change
In 2017, the Aadhaar Enrolment ID provision was introduced to provide support to individuals who had applied for an Aadhaar card but had not yet been assigned their Aadhaar number. However, as Aadhaar became widely adopted, encompassing a significant portion of the Indian population, the relevance of the Enrolment ID diminished.
This shift occurred because it was discovered that the use of the Enrolment ID could potentially result in the duplication and misuse of PAN due to its extensive reach.
Overview of the Proposed Amendments
The proposed amendments to the current provisions are as follows:
Amendment |
Description |
|---|---|
Termination of Aadhaar Enrolment ID Quoting |
The provision allowing the use of an Aadhaar Enrolment ID as per section 139AA(1) will be discontinued from October 1, 2024. Therefore, individuals must use their actual Aadhaar number when filing their PAN application and income tax returns. |
Notification of Aadhaar Number |
People who have received a PAN using their Aadhaar Enrolment ID must inform the tax authorities of their actual Aadhaar number by a certain date. This action ensures that all PAN records contain accurate Aadhaar numbers, helping to prevent any errors or misuse. |
Implementation Date
The amendments mentioned above will be effective on October 1, 2024. This period of change allows people enough time to revise their information and ensure they meet the new criteria.
Implications for Taxpayers
The implications of these changes for taxpayers include:
- Simplification and Clarity: The process of linking the Aadhaar with PAN is now simpler due to the discontinuation of the use of the Aadhaar Enrolment ID. Taxpayers no longer need to decide whether to use their Aadhaar number or Enrolment ID, as this change eliminates any confusion they may have had.
- Improved Accuracy: Updating PAN records with the correct Aadhaar numbers improves the precision of taxpayer databases. This measure decreases the chance of identity replication and the potential for PAN misuse.
- Compliance Requirements: Taxpayers who have been utilizing the Aadhaar Enrolment ID must ensure that they update their records with their correct Aadhaar number by the deadline provided. Failure to do so may lead to complications with PAN validation and the submission of income tax returns.
The decision to terminate the provisions for Aadhaar Enrolment ID represents a significant move towards simplifying the use of Aadhaar in the tax administration system. The government’s goal is to improve the accuracy and effectiveness of the tax system by establishing precise connections between all PAN records and UID numbers. Taxpayers are encouraged to promptly update their Aadhaar details to comply with the new regulations, which will take effect from October 1, 2024.
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Gaurav, an exam specialist with a passion for education, writes comprehensive articles on exam results and admit cards. His expertise ensures students receive reliable information and useful tips to excel in their exams.