Income Tax 5th Amendment Rules 2020

The Central Board of Direct Taxes has issued a notification dated 13th February 2020 called IT 5th amendment rules 2020 with rules to further amend the Income Tax Rules 1962. This new rule has come into force from 13th February after it is published in the Official Gazette.

Gist of IT 5th Amendment Rules 2020: A new rule has been inserted that will make the PAN (Permanent Account Number) of an individual inoperative in case the Aadhaar Number of the person is not provided or intimated by 31st March 2020. But if the person informs the Aadhaar Number after 31st March 2020, the PAN will become operative again from the day of intimation of the Aadhaar Number.

Section 139AA

Section 139AA of Income Tax Rules 1962, provides for mandatory quoting of Aadhaar Number or Enrolment ID of the Aadhaar application form, for

filing of return of income and for making an application for allotment of PAN with effect from 1st July 2017. Section 139AA(1) After 1st July 2017, every person who can get an Aadhaar Number needs to quote their Aadhaar Number:

in the application form for allotment of PAN
in the returns filed for income tax purposes

In case the person does not have the Aadhaar Number as yet, the 28-digit Enrolment ID of the Aadhaar application form issued to him should be quoted in the application for PAN or in the return of income filed by him. Section 139AA(2) Every person who has a PAN as on 1st July 2017, and who is eligible to obtain the Aadhaar Number, needs to intimate his Aadhaar Number to the authority in a manner stipulated. Failure to intimate the Aadhaar Number will make the PAN allotted to the person invalid and the other provisions of this Act will be applicable as if the person had not applied for allotment of PAN.

5th Amendment Rules 2020

A new rule 114AAA to be inserted after rule 114AA in Income Tax Rules, 1962. The following are the details:

A person with PAN as on 1st July 2017 needs to intimate his Aadhaar Number under sub-section (2) of Section 139AA, and if he has failed to intimate the Aadhaar number by 31st March 2020, the PAN of such person shall become inoperative with immediate effect after 31st March 2020.
For such cases where the PAN becomes inoperative the person is liable for all the consequences under the Act for not quoting the PAN.
If the person whose PAN has become inoperative intimates his Aadhaar Number under sub-section (2) of Section 139AA after 31st March 2020, his PAN shall become operative again from the date of intimation of the Aadhaar Number.
The procedure for verifying the operational status of PAN under sub-rule (1) and sub-rule (2) needs to be provided by the Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems).

The Gazette notification can be accessed below:

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Frequently Asked Questions

Common questions about Income Tax 5th Amendment Rules 2020.

The Income Tax 5th Amendment Rules 2020 is a notification issued by the Central Board of Direct Taxes on 13th February 2020, amending the Income Tax Rules 1962. It introduces a new rule that makes a person's Permanent Account Number (PAN) inoperative if their Aadhaar Number is not provided or intimated by 31st March 2020.

If you do not intimate your Aadhaar Number to the prescribed authority by 31st March 2020, your PAN will become inoperative with immediate effect after that date. This means you will be liable for consequences under the Income Tax Act for not quoting your PAN.

Yes, if your PAN has become inoperative due to not providing your Aadhaar Number by 31st March 2020, it can become operative again from the date you intimate your Aadhaar Number under sub-section (2) of Section 139AA of the Income Tax Rules.

According to Section 139AA, every person who is eligible to obtain an Aadhaar Number needs to quote their Aadhaar Number or Enrolment ID in their application for PAN allotment or in their income tax returns filed after 1st July 2017.

If you do not have an Aadhaar Number as of the date of filing your application for PAN or income tax return, you can quote the 28-digit Enrolment ID of your Aadhaar application form instead.

The Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems) will provide the procedure for verifying the operational status of a PAN under the new sub-rules (1) and (2) of Rule 114AAA.

Yes, according to Section 139AA of the Income Tax Rules, quoting your Aadhaar Number or Enrolment ID is mandatory for filing income tax returns and applying for a PAN after 1st July 2017.

If your PAN becomes inoperative due to not providing your Aadhaar Number by the deadline, you will be liable for all consequences under the Income Tax Act for not quoting a valid PAN.

The Income Tax 5th Amendment Rules 2020 came into force on 13th February 2020, the date it was published in the Official Gazette.

The official gazette notification for the Income Tax 5th Amendment Rules 2020 can be accessed from the link provided in the article.