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CS Executive · Tax Laws and Practice · Procedural Compliance under Income Tax

Under section 262 of the Income-tax Act, 2025, which of the following statements about PAN and Aadhaar is correct?

A person without a PAN who possesses an Aadhaar number may quote Aadhaar in place of PAN and will be allotted a PAN in the prescribed manner. Holding more than one PAN is prohibited, and eligible persons must quote Aadhaar in the PAN application.

  1. AA person holding a PAN may obtain a second PAN for his business
  2. BA person without a PAN who has an Aadhaar number may quote Aadhaar in lieu of PAN and shall be allotted a PAN in the prescribed mannerCorrect
  3. CQuoting Aadhaar in lieu of PAN is allowed only for persons who already hold a PAN
  4. DA person eligible for Aadhaar need not quote it in the PAN application

Explanation

Section 262(7)(a) lets a person who has no PAN but has an Aadhaar number quote Aadhaar in lieu of PAN, and a PAN is then allotted as prescribed. A second PAN is barred by sub-section (8). Sub-section (5) requires eligible persons to quote Aadhaar in the PAN application, and sub-section (7)(b) covers PAN holders who have intimated Aadhaar, so the third option is incomplete.

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