"Nearly 50% of the Population Holds PAN, Narrowing the Gender Gap"

The latest data released by the Income Tax department unveils a striking reality: nearly half of India's population now possesses a Permanent Account Number (PAN), a vital identifier in the country's financial landscape. As of March 31, 2024, the disparity between male and female PAN holders has significantly narrowed, with 42.10 crore men and 31.05 crore women holding PAN cards.

The data further stated that over 14 crore PANs are facing the threat of becoming in-operative as they have not been linked with Aadhaar (as on March 31).

Driving Factors: Understanding the Surge in PAN Card Ownership: -

• Mandatory PAN Requirement: - The mandatory requirement of PAN in various financial transactions. For example, "From banking to property transaction, vehicle purchases to credit card applications, and even foreign exchange transactions, the Permanent Account Number (PAN) is mandated, serving as the linchpin for financial transparency and accountability."

• Regulatory Mandate: -The Income-Tax Rules’ Rule 114(B) lists the eighteen categories of financial transactions for which providing a PAN is mandatory.

• AADHAR Linkage Mandate: - up to March 31, 2024, over 60.5 crore of the 74.67 crore PANs were linked to Aadhaar. The PAN-Aadhaar linkage helped in eliminating a significant number of duplicate PANs.
  

• Increase in numbers of Female Investor: - The rise of female investors is not only closing the gap in ownership between males and females but also heralding a new era of gender equality in investment participation.

The Central Board of Direct Taxes (CBDT) had set a definitive deadline, initially on July 1, 2023, for the mandatory linkage of PANs with Aadhaar, a process subjected to several extensions. Failing to adhere to this requirement would render PANs disconnected from the system, resulting in a cessation of various essential services for taxpayers.

Consequently, individuals would face implications such as higher rates of Tax Deducted at Source (TDS) and Tax Collected at Source (TCS), alongside delays in receiving pending income tax returns. Moreover, those who failed to meet the deadline and linked their PAN to Aadhaar afterward would be subject to an additional late penalty of Rs 1,000.

In a recent announcement, the Central Board of Direct Taxes (CBDT) has offered a glimmer of relief to taxpayers grappling with unlinked PAN and Aadhaar cards. Transactions conducted up to March 31, 2024, will not incur higher rates of Tax Deducted at Source (TDS) or Tax Collected at Source (TCS), provided that PANs become operative by May 31 of the same year.