Sub-section (1) requires a person without a Permanent Account Number to apply for one within the prescribed time if he meets any of six conditions — his own or an assessable other person's total income exceeded the maximum amount not chargeable to tax; his business or profession has sales, turnover or gross receipts that are or are likely to exceed Rs. 5,00,000 in a tax year; he must furnish a return under section 263; he is a resident other than an individual entering into financial transactions aggregating Rs. 2,50,000 or more in a tax year; he is a managing director, director, partner, trustee, author, founder, karta, chief executive officer, principal officer, office bearer or other person competent to act on behalf of such a resident; or he intends to enter a transaction prescribed by the Board in the interest of revenue. Sub-section (2) lets anyone else apply voluntarily, and sub-sections (3) and (4) require the number to be quoted in all returns, correspondence with income-tax authorities and challans, and any change of address or of the name and nature of the business to be intimated. Sub-sections (5) to (7) tie the number to Aadhaar: an Aadhaar-eligible person must quote it in the application and in the return, others already holding a Permanent Account Number must intimate their Aadhaar number to the prescribed authority, failing which the Permanent Account Number is made inoperative, and Aadhaar may be furnished in lieu of the Permanent Account Number by a person who has none or who has intimated it under sub-section (6). Sub-section (8) prohibits holding a second Permanent Account Number; sub-section (9) requires the number or Aadhaar to be quoted and authenticated in documents for prescribed transactions and puts a matching duty on the person receiving such documents. Sub-sections (10) to (12) contain the rule-making power of the Board, the Central Government's power to notify classes of persons who must apply (including persons liable to tax under any other law and importers and exporters even where no tax is payable), and a power to notify persons, classes or States to whom sub-sections (5) and (6) do not apply. Sub-section (13) defines "Aadhaar number", "Assessing Officer" and "authentication".
Why it is there
The section builds a single identifier that follows a person through returns, correspondence, payments and prescribed transactions, so that dealings can be matched to a taxpayer. Linking it to Aadhaar, with the sanction that an unlinked number goes inoperative, and forbidding a second number, are the means of keeping one person to one identity.
Who it applies to
A person whose total income, or the total income of another person for whom he is assessable, exceeded the maximum amount not chargeable to income-tax
A person carrying on business or profession with sales, turnover or gross receipts exceeding or likely to exceed Rs. 5,00,000
A person required to furnish a return under section 263
A resident other than an individual entering into financial transactions aggregating Rs. 2,50,000 or more in a tax year
The managing director, director, partner, trustee, author, founder, karta, chief executive officer, principal officer or office bearer of such a resident, or any person competent to act on its behalf
A person receiving a document relating to a prescribed transaction
The Assessing Officer, including an income-tax authority assigned the duty of allotting the number
The figures, and what each one turns on
Read the condition in the same row. A figure quoted without it is a wrong answer with a citation attached.
What
Figure
The condition on it
Where
Business threshold requiring an application
Rs. 5,00,000
Total sales, turnover or gross receipts in a tax year that are, or are likely to be, exceeded — a receipts test, not an income test
262(1)(b)
Financial transaction threshold
Rs. 2,50,000 or more
Aggregate in a tax year, and only for a resident other than an individual; it also pulls in that entity's office bearers under clause (e)
262(1)(d)
Income threshold requiring an application
The maximum amount not chargeable to income-tax
The section states no rupee figure; it takes the exemption limit from elsewhere, and applies to income of another person for whom the applicant is assessable as well as his own
262(1)(a)
Time to apply for allotment
Within such time as may be prescribed
No period is fixed in the section; for a class notified under sub-section (11)(a) the time is stated in the notification
262(1) and 262(11)(a)
What this means in practice
Check the six triggers separately — the turnover test in clause (b) is on sales, turnover or gross receipts, and it bites on a figure that is merely "likely to exceed" Rs. 5,00,000, so a new business may need to apply before it has earned anything. An entity that is resident and not an individual crossing Rs. 2,50,000 of financial transactions in a year brings not only itself but its directors, partners, trustees, karta, principal officer and anyone competent to act for it within the requirement. Once you hold a number, quote it in every return, in correspondence with any income-tax authority and on every challan, intimate any change of address or of the name and nature of the business, and if you are eligible for Aadhaar, intimate that too — failure to do so makes the Permanent Account Number inoperative in the prescribed manner. Never apply for or hold a second number, and where a prescribed transaction is involved, both the person entering it and the person receiving the document have duties: to quote and authenticate, and to ensure it has been quoted and authenticated.
An example
Illustrative only, and invented for this page. The figures are chosen to show the rule biting, not taken from any real matter.
A newly incorporated resident company with no income at all enters financial transactions aggregating Rs. 3,00,000 in its first tax year. Clause (d) is crossed at Rs. 2,50,000, so the company must apply to the Assessing Officer for allotment within the prescribed time — and clause (e) then pulls in its directors and anyone else competent to act on its behalf, who must apply as well. A proprietor is caught on a different test: clause (b) bites where sales, turnover or gross receipts are or are merely likely to exceed Rs. 5,00,000 in the year, so a new business may have to apply before it has earned a rupee of profit. Once a number is held and Aadhaar is not intimated under sub-section (6), the consequence is not a fee alone — clause (b) makes the Permanent Account Number itself inoperative in the prescribed manner.
Where you meet this section
In the application for allotment made to the Assessing Officer, and thereafter in every return, in all correspondence with any income-tax authority and on every challan, where sub-section (3) makes quoting compulsory. It also reaches the other side of a transaction: under sub-section (9)(b) the person receiving a document for a prescribed transaction must ensure the number or Aadhaar has been quoted and authenticated.
The words themselves
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 may be prescribed
Section 262(6)(b), Income-tax Act, 2025.
What people get wrong
Reading clause (b) as a profit test. It is sales, turnover or gross receipts, and it applies where those are merely likely to exceed Rs. 5,00,000 in the tax year.
Applying the Rs. 2,50,000 transaction test to individuals. Clause (d) is confined to a resident other than an individual — though clause (e) then catches the individuals who run or can act for that entity.
Treating failure to intimate Aadhaar as a mere lapse. Sub-section (6)(b) makes the Permanent Account Number itself inoperative in the prescribed manner.
Overlooking the duty on the recipient of a document. Sub-section (9)(b) requires the person receiving a document for a prescribed transaction to ensure the number or Aadhaar has been quoted and authenticated.
What this replaced
The correspondence is the Income Tax Department’s own, from its comparison utility for the 1961 and 2025 Acts. A renumbering is the easy half; whether the words changed is the half that decides cases.
Rules of the Income-tax Rules, 2026 that work section 262. Where the rule’s own heading names the section we say so; the rest are marked on reading the rule, which is our derivation and not the department’s. A rule that serves the section silently and that we have missed will not appear here.
Rule 157 — Persons exempt from obtaining Permanent Account Number under section 262
Rule 158 — Application for allotment of a Permanent Account Number — on reading the rule
Rule 159 — Transactions in relation to which Permanent Account Number is to be quoted or applied for purposes of section 262(1)(f), 262(10)(c) and (e)
Rule 161 — Transactions for purposes of section 262(9)(a)
Rule 162 — When PAN becomes inoperative under section 262(6)
Rule 217 — Conditions under section 397(2)(c) for non-application of deduction of tax at higher rate, in case of non-residents — on reading the rule
A circular binds the department, not you and not a court. Every one below was written under the 1961 Act; it reaches this section because the department’s own concordance carries the provision it names to this one.
Circular No. 3/2023 — Consequences of PAN becoming inoperative as per the newly substituted rule 114AAA 2023-03-28
Circular No. 7/2022 — Clarification with respect to relaxation of provisions of rule 114AAA of income tax rules 1962 prescribing the manner of making pe 2022-03-30
Circular No. 6/2019 — Giving effect to the judgement(s)/order(s) of Hon'ble Supreme Court on Aadhaar-PAN for filing return of income 2019-03-31
A notification is made under a power the Act gives and, within that power, is law. These too were made under the 1961 Act and are placed here by the department’s concordance.
Notification No. 179 — A notification under section 139A of the Income-tax Act, 1961 2005-06-30
Notification No. 205 — Following Scheme for electronic filing of return of tax deducted at source specified under section 139A 2003-08-26
Notification No. 511E- — Following dates from which the provisions of the said sub-section shall apply in respect of the following class or classes of pers 2001-06-11
Notification No. 775(E) — Following class or classes of persons specified under section 2 2000-08-29
SO 543(E) — In excercise of the powers conferred by sub-section (4) of section 139A of the Income-Tax Act,1961 (43 of 1961), the Central Board 1998-06-30
S.O. 543(E) — A notification under section 139A of the Income-tax Act, 1961 1998-06-30
Notification No. 354E — A notification under section 139A of the Income-tax Act, 1961 1998-04-28
Notification No. 123E — Every person who is assessed or liable to be assessed by an Assessing Officer under the control of any income-tax authority in Ind 1998-02-11
Notification No. 714E — A notification under section 139A of the Income-tax Act, 1961 1996-10-14
Notification No. 426E — A notification under section 139A of the Income-tax Act, 1961 1996-06-10
Notification No. 379E — Every person who is assessed or liable to be assessed by the Assessing Officer falling under the control of the income-tax authori 1996-05-30
Notification No. 274E — In execrise of the powers conferred by sub-section (4) of section 139A of the Income-tax Act, 1961 (43 of 1961), the Central Board 1976-04-01
Read this before you rely on it. Every decision below was decided under the Income-tax Act, 1961. It appears here because it is tagged to a 1961 provision that the department’s own mapping carries to section 262. That is an inference we have drawn, not a holding on the new section: where the words changed in the move, the reasoning may not survive. Treat this as the place to start looking, not as authority on the 2025 Act.
Binoy Viswam v Union of IndiaSupreme CourtCuts both waystagged s.139A Is the Aadhaar-PAN requirement in s.139AA valid, and can my existing PAN be cancelled under it?
Read with
Section 263
What this page does not tell you. It does not reproduce the section. Everything above was written from the section’s own text as the Income Tax Department publishes it — the text is here, and nothing here is advice on your facts. Where a figure matters, read the sub-section it comes from.
