Income Tax Act 1961 Section 269UN

Income Tax Act Section 269UN requires certain specified persons to quote their Permanent Account Number (PAN) when entering into financial transactions. This provision aims to enhance transparency and curb tax evasion by linking transactions with taxpayer identities.

Understanding Section 269UN is crucial for taxpayers, professionals, and businesses to ensure compliance and avoid penalties related to non-quoting of PAN in applicable transactions.

Income Tax Act Section 269UN – Exact Provision

This section mandates quoting PAN or Aadhaar for certain transactions by specified persons. It helps the tax authorities track financial dealings and prevent tax evasion. Failure to comply attracts penalties.

• Applies to specified persons and specified transactions.

• Requires quoting PAN or Aadhaar at transaction time.

• Promotes transparency and tax compliance.

• Non-compliance leads to penalties.

Explanation of Income Tax Act Section 269UN

Section 269UN requires quoting PAN or Aadhaar in certain financial dealings to link transactions with taxpayer identity.

• What it states:

  Specified persons must quote PAN/Aadhaar in specified transactions.

• Who it applies to:

  Individuals, firms, companies, and other specified persons.

• Key conditions:

  Applies only to transactions listed as specified transactions.

• Triggering events:

  At the time of entering into the transaction.

• Allowed:

  Quoting Aadhaar if PAN is not available.

• Disallowed:

  Transactions without PAN/Aadhaar quoting are non-compliant.

Purpose and Rationale of Income Tax Act Section 269UN

This section aims to ensure transparency in financial transactions and prevent tax evasion by linking transactions to PAN or Aadhaar.

• Ensures fair taxation by tracking transactions.

• Prevents tax evasion and unreported income.

• Encourages compliance with tax laws.

• Supports efficient revenue collection.

When Income Tax Act Section 269UN Applies

Section 269UN applies during specified financial transactions in the relevant financial year, affecting specified persons based on transaction nature.

• Relevant in the financial year when transaction occurs.

• Applies to specified transactions like sale or purchase of goods or services.

• Residential status does not exempt compliance.

• Exceptions may apply as per rules notified by the government.

Tax Treatment and Legal Effect under Income Tax Act Section 269UN

Section 269UN does not directly tax income but enforces quoting PAN/Aadhaar to ensure proper reporting. Non-compliance may lead to penalties affecting overall tax liability.

It interacts with provisions on tax deduction and reporting, aiding in accurate income computation and compliance verification.

• Does not alter income tax computation directly.

• Ensures compliance for tax reporting and deduction.

• Non-quoting may trigger penalties and scrutiny.

Nature of Obligation or Benefit under Income Tax Act Section 269UN

This section creates a mandatory compliance duty for specified persons to quote PAN/Aadhaar in specified transactions. It benefits tax administration by improving transparency.

The obligation is conditional on the nature of the transaction and the person involved.

• Mandatory compliance for specified persons.

• Conditional on transaction type.

• Benefits tax authorities and compliant taxpayers.

• Non-compliance leads to penalties.

Stage of Tax Process Where Section Applies

Section 269UN applies at the transaction initiation stage, ensuring PAN/Aadhaar quoting before or during the transaction.

• At the time of entering into the specified transaction.

• Before payment or receipt related to the transaction.

• Relevant for return filing and assessment verification.

• Non-compliance may be detected during assessment or audit.

Penalties, Interest, or Consequences under Income Tax Act Section 269UN

Failure to quote PAN or Aadhaar as required under Section 269UN attracts a penalty of ₹10,000 for each failure. There is no direct interest liability, but non-compliance can lead to scrutiny and further consequences.

• Penalty of ₹10,000 per failure to quote PAN/Aadhaar.

• No direct interest but may trigger assessments.

• Possible increased scrutiny and audit.

• Repeated defaults may attract prosecution under other provisions.

Example of Income Tax Act Section 269UN in Practical Use

Assessee X, a trader, purchases goods worth ₹5 lakh from Supplier Y. At the time of transaction, Assessee X must quote PAN or Aadhaar to Supplier Y. Failure to do so may lead to a penalty of ₹10,000 imposed on Assessee X.

This ensures that the transaction is recorded with proper taxpayer identification, aiding tax compliance.

• Mandatory PAN quoting during high-value transactions.

• Non-compliance results in monetary penalty.

Historical Background of Income Tax Act Section 269UN

Section 269UN was introduced to strengthen the PAN quoting framework and enhance transparency in financial transactions. It evolved through amendments in Finance Acts to include Aadhaar as an alternative and expand the scope of specified transactions.

• Introduced to curb tax evasion via untraceable transactions.

• Amended to include Aadhaar quoting.

• Expanded scope through Finance Act amendments.

Modern Relevance of Income Tax Act Section 269UN

In 2026, Section 269UN is vital for digital tax compliance, linking transactions with PAN/Aadhaar in electronic filings and TDS returns. It supports faceless assessments and automated information systems.

• Supports digital compliance and AIS reporting.

• Essential for faceless assessment processes.

• Ensures transparency in digital and offline transactions.

Related Sections

• Income Tax Act Section 139 – Filing of returns.

• Income Tax Act Section 194 – TDS on payments.

• Income Tax Act Section 206AA – Mandatory PAN for TDS.

• Income Tax Act Section 271F – Penalty for failure to furnish PAN.

• Income Tax Act Section 269ST – Prohibition on cash transactions above prescribed limits.

• Income Tax Act Section 285BA – Reporting of specified financial transactions.

Case References under Income Tax Act Section 269UN

No landmark case directly interprets this section as of 2026.

Key Facts Summary for Income Tax Act Section 269UN

• Section:

  269UN

• Title:

  Quoting of PAN or Aadhaar for specified transactions

• Category:

  Compliance, PAN quoting

• Applies To:

  Specified persons including individuals, firms, companies

• Tax Impact:

  Ensures transaction traceability; non-compliance attracts penalty

• Compliance Requirement:

  Mandatory quoting of PAN/Aadhaar at transaction time

• Related Forms/Returns:

  TDS returns, Annual Information Statement (AIS)

Conclusion on Income Tax Act Section 269UN

Section 269UN plays a crucial role in ensuring transparency and accountability in financial transactions by mandating PAN or Aadhaar quoting. This helps tax authorities track transactions and reduces tax evasion risks.

Taxpayers and businesses must comply with this provision to avoid penalties and facilitate smooth tax administration. Awareness and adherence to Section 269UN contribute to a fair and efficient tax system.

FAQs on Income Tax Act Section 269UN

Who is required to quote PAN under Section 269UN?

Specified persons, including individuals, companies, and firms, must quote PAN or Aadhaar when entering into specified financial transactions as defined under the Act.

What happens if PAN is not quoted in a specified transaction?

Failure to quote PAN or Aadhaar attracts a penalty of ₹10,000 for each such failure, and may lead to further scrutiny by tax authorities.

Can Aadhaar be quoted instead of PAN under this section?

Yes, if PAN is not available, quoting Aadhaar is allowed as an alternative for specified transactions under Section 269UN.

Does Section 269UN apply to cash transactions?

Section 269UN applies to specified transactions which may include cash or non-cash transactions as notified; however, cash transaction limits are separately governed under Section 269ST.

When must PAN or Aadhaar be quoted as per Section 269UN?

PAN or Aadhaar must be quoted at the time of entering into the specified transaction to ensure compliance with the provision.