Section 262 — PAN | ITA 2025

Section 262 — - PERMANENT ACCOUNT NUMBER

Section 262 is the substantive equivalent of 1961 s. 139A -- the foundational provision establishing PAN (Permanent Account Number) as the universal taxpayer identifier and prescribing eligibility / mandatory categories / Aadhaar-PAN linkage / quotation requirements / penalties for non-compliance. PAN is a 10-character alphanumeric code issued by the IT Department through approved entities (NSDL / UTIITSL). Universal applicability: all assessees whose taxable income exceeds basic exemption / certain transaction thresholds. AADHAAR-PAN LINKAGE became mandatory under FA 2017 with sunset 31-Mar-2023 (extended to 30-Jun-2023; PAN becomes 'inoperative' if not linked); penalties under separate provisions. PAN is the identification anchor for ALL tax compliance -- TDS / TCS / return-filing / audit / appeals.

Statutory text — Income-tax Act, 2025

Marginal note -- Permanent Account Number

(1) Every person who has not been allotted a Permanent Account Number shall, within such time as may be prescribed, apply to the Assessing Officer for its allotment if he fulfils any of the following conditions:—

(a) his total income or the total income of any other person for which he is assessable under this Act during any tax year exceeded the maximum amount not chargeable to income-tax; or

(b) he is carrying on any business or profession whose total sales, turnover or gross receipts are or is likely to exceed ` 5,00,000 in any tax year; or

(c) he is required to furnish a return of income under section 263 for any tax year; or

(d) he is a resident, other than an individual, which enters into a financial transaction aggregating to ` 2,50,000 or more in a tax year; or

(e) he is the managing director, director, partner, trustee, author, founder, karta, chief executive officer, principal officer or office bearer of the per- son referred to in clause (d) or any person competent to act on behalf of the person referred to in clause (d); or

(f) he intends to enter into such transaction as may be prescribed29a by the Board in the interest of revenue.

(2) Any person, not covered under sub-section (1) may apply to the Assessing Officer for the allotment of a Permanent Account Number after which the Assessing Officer shall allot a Permanent Account Number to such person.

(3) Every person shall quote Permanent Account Number in all his returns to, or correspondence with, any income-tax authority and in all challans for the payment of any sum due under this Act.

(4) Every person shall intimate the Assessing Officer of any change in his address or in the name and nature of his business on the basis of which the Permanent Account Number was allotted to him.

(5) Every person who is eligible to obtain Aadhaar number shall quote such number in the application form for allotment of Permanent Account Number and in the return of income. (6)(a) For the cases other than sub-section (5), every person who has been allotted Permanent Account Number and who is eligible to obtain Aadhaar number, shall intimate his Aadhaar number to the prescribed income-tax authority in such form and manner, as may be prescribed;

(b) if a person fails to intimate his Aadhaar number as per clause (a), the Permanent Account Number allotted to that person shall be made inoperative in such manner as may be prescribed.

(7) Every person who is required to furnish or intimate or quote his Permanent Account Number under this Act, and who—

(a) has not been allotted a Permanent Account Number but possesses the Aadhaar number, may furnish or intimate or quote his Aadhaar number in lieu of the Permanent Account Number, and such person shall be allotted a Permanent Account Number in the manner, as may be prescribed;

(b) has been allotted a Permanent Account Number, and who has intimated his Aadhaar number as per sub-section (6) may furnish or intimate or quote his Aadhaar number in lieu of the Permanent Account Number.

(8) A person who has already been allotted a Permanent Account Number cannot apply, obtain or possess another Permanent Account Number. (9)(a) Every person entering into such transaction, as may be prescribed, shall quote his Permanent Account Number or Aadhaar number, in the documents pertaining to such transactions and also authenticate such Permanent Account Number or Aadhaar number, in the manner, as may be prescribed;

(b) every person receiving any document relating to the transactions referred to in clause (a), shall ensure that Permanent Account Number or Aadhaar number, has been duly quoted in such document and that such Permanent Account Number or Aadhaar number is authenticated in such manner, as may be prescribed.

(10) The Board may make rules providing for—

(a) the form, manner and time in which an application may be made for the allotment of Permanent Account Number and the particulars which such application shall contain;

(b) class or classes of persons who shall be required to apply for allotment of Permanent Account Number;

(c) categories of documents 43[pertaining to, business or profession, or other transactions,] in which Permanent Account Number shall be quoted by every person;

(d) the form and manner in which the person who has not been allotted a Permanent Account Number shall make his declaration;

(e) manner of authentication of Permanent Account Number or Aadhaar number;

(f) class or classes of persons to whom the provisions of this section shall not apply having regard to the transactions or the circumstances. (11)(a) The Central Government may, by notification, specify any class or classes of persons who shall apply to the Assessing Officer for the allotment of Permanent Account Number within such time as mentioned in such notification;

(b) the class or classes of persons in clause (a) may include such persons––

(i) by whom tax is payable under this Act; or

(ii) by whom any tax or duty is payable under any other law in force; or

(iii) being importers and exporters, even when no tax is payable by them.

(12) The provisions of sub-sections (5) and (6) shall not apply to such person or class or classes of persons or any State or part of any State, as may be notified by the Central Government.

(13) For the purposes of this section,—

(a) “Aadhaar number” shall have the same meaning as assigned to it in section 2(a) of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 (18 of 2016);

(b) “Assessing Officer” includes an income-tax authority who is assigned the duty of allotting Permanent Account Number;

(c) “authentication” means the process by which the Permanent Account Number or Aadhaar number along with demographic information or biometric information of an individual is submitted to the income-tax authority or such other authority or agency as may be prescribed for its verification and such authority or agency verifies the correctness, or the lack thereof, on the basis of information available with it. B.—Filing of return of income Return of income.

Corresponding provision — 1961 regime

INCOME-TAX ACT, 2025	INCOME-TAX ACT, 1961
INCOME-TAX ACT, 2025 -- s. 262	INCOME-TAX ACT, 1961 -- s. 139A
Sub-s. (1) -- PAN allotment to all persons taxable / specified	1961 s. 139A(1)/(1A)
Sub-s. (2)-(3) -- mandatory categories / quotation requirements	1961 s. 139A(5)
Aadhaar-PAN linkage (FA 2017)	1961 s. 139AA
Quotation in financial transactions	1961 s. 139A(5A)/(5C)
Inoperative PAN (post 30-Jun-2023)	1961 s. 139AA Proviso

STATUTORY ARCHITECTURE

PAN ALLOTMENT MANDATORY for: (a) Every person whose total income exceeds basic exemption (INR 4L new regime / INR 3L old regime); (b) Every person engaged in business / profession with turnover > INR 5L; (c) Every charitable trust / political party / RP / NPO / SEZ unit / specified entities; (d) Persons engaged in specified financial transactions (deposit > INR 50K / cash > INR 10L / property purchase > INR 30L etc.); (e) Foreign company / NR earning Indian-source income exceeding threshold. AADHAAR-PAN LINKAGE: mandatory for resident individuals; PAN becomes INOPERATIVE if not linked by 30-Jun-2023 (extended); inoperative PAN cannot file return / claim refund. QUOTATION REQUIREMENTS: PAN must be quoted in: (a) Income-tax returns / challans; (b) TDS / TCS-related communications; (c) High-value transactions (cash deposit > INR 50K / property > INR 30L / jewellery > INR 5L cash / etc.); (d) Financial-institution KYC requirements. PENALTIES (s. 272 / 1961 s. 272B): INR 10,000 per violation for failure to quote / quote incorrect PAN.

PRACTITIONER NOTES

(i) PAN APPLICATION: Form 49A (resident) / 49AA (NR / foreign) via NSDL / UTIITSL portal; processing typically 7-15 days. (ii) AADHAAR-PAN LINKAGE: link via e-filing portal; inoperative PAN reactivation possible with penalty INR 1,000 per FA 2023. (iii) DUPLICATE PAN: surrender via Form 49A; non-surrender attracts s. 272B penalty. (iv) NRI PAN: required for any Indian-source income; Form 49AA submission with passport copy. (v) FOREIGN-CO PAN: required for any India-related transaction triggering source charge.

CROSS-REFERENCES

Section 263 -- Return filing (PAN required).
Section 393 -- TDS framework (PAN required for resident-payee).
Section 397 -- TDS without PAN (20% / higher rate).
Section 272 / 1961 s. 272B -- Penalty for PAN violations.
Aadhaar Act 2016 / Aadhaar regulations.

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