PAN Card Update: PAN Card May Not Be Needed For Financial Transactions From Next Year | Here’s Why

PAN Card Update: Recently, some of the major banks in the country urged the Central government to drop the requirement for PAN as most accounts are already linked with Aadhaar.

PAN Card Update: From the financial year, PAN card may not be required for some financial transactions as the Central government in the upcoming Budget 2023-24 is likely to propose doing away with the requirement of furnishing a Permanent Account Number (PAN) card for financial transactions backed by Aadhaar. The move from the Finance Ministry is aimed at simplifying rules as demanded by financial institutions and banks.

Recently, some of the major banks in the country urged the Central government to drop the requirement for PAN as most accounts are already linked with Aadhaar.

One source close to the developments of the matter told Economic Times that the government had received representations in the regard, and they are being inspected.

The financial transactions where PAN is not provided are subjected to a Tax Deducted at Source (TDS) of 20%, even if the applicable rate is lower, as per Section 206AA of the Income Tax Act.

And some of the major banks want the Income Tax Act to be amended in order to avoid unnecessary duality and confusion caused due to the present system.

In this regard, the banks are of opinion that almost all individual accounts are seeded with Aadhaar numbers and they argue that Section 139A(5E) of the Income Tax Act allows users to furnish an Aadhaar number instead of a PAN card for certain transactions.