Pan Card: Currently if PAN is not provided then as per section 206AA of the Income Tax Act, the transaction is taxed at 20% subject to deduction on withdrawals.
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Permanent Account Number: If you have a PAN card then you are going to get a big relief. Because in the upcoming budget 2023 some financial transactions (Financial TransactionsThere can be a big decision on abolishing the requirement of Permanent Account Number (PAN) for . At present, if PAN is not provided, as per section 206AA of the Income Tax Act, the transaction is taxed at 20% subject to deduction on withdrawals, even if the applicable rate is lower. Banks have approached the government saying that all accounts are linked to Aadhaar, so there is no need for PAN.
In this case, an official said that he has got to see many things in this regard and they are being investigated. Some lenders have suggested amendments to the Income Tax Act, as the current one is creating unnecessary complications in the conduct of banking business. Lenders have pointed out that almost all bank accounts are already linked with Aadhaar number in case of individuals, and under section 139A(5E) of the Income Tax Act, allowing updating of Aadhaar instead of PAN for certain specified transactions Is.
The main objective is to prevent tax evasion
The clarification may come in the form of a certain prescribed limit and transactions below that limit may not require PAN, the official said. He said the objective of section 206AA is to ensure that TDS is applied at the correct rate and to prevent tax evasion by persons or entities who do not have PAN or who do not quote their PAN in specified transactions.
Experts say a clarification will benefit individual taxpayers, who are otherwise not required to obtain PAN, but may face higher tax deductions while making certain transactions. These include new bank account holders and people with income below the taxable limit.
There may be a problem with the transaction
Vikas Vasal, national managing partner of tax at Grant Thornton India LLP, said a person whose income is below the taxable limit, such as a housewife or a pensioner, and has not obtained a PAN, would be entitled to a higher rate of tax deduction in certain cases. You may face problems in transactions based on
A bank official said that Aadhaar is also used as ‘address proof’, hence it has wide acceptance and any clarification regarding interchangeable use will benefit all stakeholders including individuals.
No need to generate PAN
Please tell that more than 120 crore people have Aadhaar in the country. If someone wants a PAN card, he has to first use Aadhaar, generate PAN, then he starts using it. Now due to Aadhaar, he will not need to generate PAN. When asked whether Aadhaar can be used in lieu of PAN for cash deposits or withdrawals above Rs 50,000 in a bank account, he said it can be done.
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