Permanent Account Number
[As per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 262(1) of Income Tax Act 2025
262(1) Every person who has not been allotted a Permanent Account Number shall, within such time as 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;
- (b) he is carrying on any business or profession whose total sales, turnover or gross receipts are or is likely to exceed five lakh rupees in any tax year;
- (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 two lakh fifty thousand rupees 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 person referred to in clause (d) or any person competent to act on behalf of the person referred to in clause (d).
Section 262(2) of Income Tax Act 2025
262(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.
Section 262(3) of Income Tax Act 2025
262(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.
Section 262(4) of Income Tax Act 2025
262(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.
Section 262(5) of Income Tax Act 2025
262(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.
Section 262(6) of Income Tax Act 2025
262(6)(a) 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 prescribed;
262(6)(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 prescribed.
Section 262(7) of Income Tax Act 2025
262(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 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.
Section 262(8) of Income Tax Act 2025
262(8) A person who has already been allotted a Permanent Account Number cannot apply, obtain or possess another Permanent Account Number.
Section 262(9) of Income Tax Act 2025
262(9)(a) Every person entering into such transaction, as 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 prescribed;
262(9)(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 as prescribed.
Section 262(10) of Income Tax Act 2025
262(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 pertaining to business or profession 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.
Section 262(11) of Income Tax Act 2025
262(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;
262(11)(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.
Section 262(12) of Income Tax Act 2025
262(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 notified by the Central Government.
Section 262(13) of Income Tax Act 2025
262(13) In 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;
- (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 prescribed for its verification and such authority or agency verifies the correctness, or the lack thereof, on the basis of information available with it.
FAQs on Section 262 of Income Tax Act 2025
What is a Permanent Account Number (PAN)?
A Permanent Account Number is a unique alphanumeric identifier allotted by the income-tax authority for the purpose of tracking tax-related activities under the Income Tax Act, 2025.
Who is required to apply for PAN under Section 262(1)?
Any person must apply for PAN if they fall under one of the following:
- Their total income, or the income of another person assessable by them, exceeds the amount not chargeable to tax.
- They carry on business or profession with total sales, turnover or gross receipts exceeding or likely to exceed ₹5 lakh in a tax year.
- They are required to file a return of income under Section 263.
- They are a resident (other than an individual) entering into financial transactions aggregating to ₹2.5 lakh or more in a tax year.
- They are a director, partner, trustee, founder, karta, CEO or similar office bearer of such an entity.
Can a person voluntarily apply for PAN even if not required under Section 262(1)?
Yes, under Section 262(2), any person not covered under mandatory provisions may voluntarily apply for PAN.
Where should PAN be quoted?
As per Section 262(3), PAN must be quoted in all returns, correspondence with income-tax authorities, and challans for payment of any amount under the Act.
What should be done if there is a change in address or nature of business?
As per Section 262(4), any change in address or the name/nature of business must be reported to the Assessing Officer.
Is Aadhaar required while applying for PAN?
Yes, under Section 262(5), a person eligible to obtain an Aadhaar number must quote it in the PAN application and in their return of income.
What happens if a person fails to link Aadhaar with PAN?
If a person fails to intimate their Aadhaar number as required under Section 262(6), their PAN will be made inoperative in the prescribed manner.
Can Aadhaar be used in place of PAN?
Yes, a person who has not been allotted PAN but possesses Aadhaar may quote Aadhaar instead and will be allotted a PAN. Also, if PAN has already been linked with Aadhaar, Aadhaar may be quoted in lieu of PAN.
Is it allowed to have more than one PAN?
No. As per Section 262(8), a person who has been allotted a PAN cannot apply for, obtain, or possess another PAN.
In which transactions must PAN or Aadhaar be quoted and authenticated?
Under Section 262(9), every person entering into prescribed transactions must quote and authenticate PAN or Aadhaar in relevant documents. The recipient must also ensure quoting and authentication.
What powers does the Board have under Section 262(10)?
The Board can make rules regarding:
- Form, time and manner of application
- Classes of persons required to apply
- Business-related documents in which PAN must be quoted
- Declaration for persons not allotted PAN
- Manner of authentication
- Classes of persons to whom this section does not apply
Can the government specify additional persons who must apply for PAN?
Yes. Under Section 262(11), the Central Government may notify classes of persons required to apply for PAN, including:
- Persons liable to pay tax under this Act
- Persons liable to pay tax or duty under any other law
- Importers and exporters even if not liable to tax
Are there any exemptions from quoting or linking Aadhaar?
Yes. As per Section 262(12), the Central Government may notify persons or States/areas exempt from the Aadhaar-related requirements in sub-sections (5) and (6).
What does “authentication” mean in the context of PAN or Aadhaar?
Authentication means verifying PAN or Aadhaar along with demographic or biometric information through the income-tax authority or a prescribed agency.
Who is considered an Assessing Officer for PAN?
An Assessing Officer includes any income-tax authority designated to allot PAN.
What is the meaning of Aadhaar number in this section?
Aadhaar number refers to the meaning assigned in Section 2(a) of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016.