Income Tax Bill 2025 Update: Finance Minister Nirmala Sitharaman presented the new Income Tax Bill in the Lok Sabha on Thursday. The government aims to simplify many rules and reduce long-standing legal disputes through this bill. Several major changes related to income tax are expected, which will directly impact taxpayers.
Under the new bill, individuals eligible for an Aadhaar number must provide it while filing their Income Tax Return (ITR) or applying for a PAN. Additionally, those who already have a PAN and are eligible for Aadhaar must submit their Aadhaar details to the Income Tax Authority in the prescribed manner.
If a person fails to provide their Aadhaar number, their PAN will become inactive. The bill states, “Every person who is eligible to get an Aadhaar number must provide their Aadhaar number in the application for PAN allotment and the income tax return.”
Mandatory PAN Requirement
Everyone must quote their PAN in all income tax returns, any communication with the Income Tax Authority, and on all challans for payments under the Income Tax Act 2025.
Reporting Changes in Personal Information
Individuals must inform the Assessing Officer about any changes in their address, name, or business details used for PAN allotment.
Aadhaar Instead of PAN
If a person hasn’t been allotted a PAN, they can provide their Aadhaar number if necessary. Even if they already have a PAN, they can submit their Aadhaar number if they wish, provided they have informed the tax authority.
When is PAN Mandatory?
PAN is required in all income tax returns, communications with the Income Tax Authority, and for payments due under the Income Tax Act 2025.
Informing Changes in Address
As per the bill, individuals must inform the assessing officer about any changes in their address, name, or business information used for PAN allotment.
When Can Aadhaar Be Used Instead of PAN?
The bill allows Aadhaar to be used in place of a PAN if a person has not been allotted a PAN. Aadhaar can also replace PAN if the individual has already been allotted a PAN and has informed the tax authority about it.
Who Needs to Apply for a PAN?
A person must apply for PAN if they meet any of the following criteria:
- Their total income or the total income of any other person for whom they are assessable exceeds the basic exemption limit.
- They are running a business or profession with sales, turnover, or gross receipts exceeding ₹5 lakh in any tax year.
- They are required to file an income tax return under Section 263 in any tax year.
- They are a resident, other than an individual, and engage in a financial transaction of ₹2.5 lakh or more in a tax year.
- They are the managing director, director, partner, trustee, author, founder, CEO, principal officer, office bearer, or anyone authorized to act on behalf of the person referred to in the fourth point.
