Government shelves plan for mandatory Unique Transaction Number

The government has decided to shelve the introduction of a Unique Transaction Number (UTN) which tax payers were expected to quote along with their Permanent Account Number (PAN) to take credit for tax deducted at source (TDS). The scheme was to have come into force from 1 January.

"The introduction of UTN, which was scheduled to be implemented from January 2010, has been shelved in all probability. The process of filing tax returns remains the same as earlier," a senior finance ministry official told newspersons in New Delhi on Wednesday.

However, he said, the ministry has not stopped toying with the idea of introducing the UTN or a similar fresh ID number from the next fiscal. The use of UTN, in addition to the PAN, was indented to ensure prompt verification and grant of tax credits to employees having their tax deducted at source.

The government had earlier said the system of allotting UTN was "expected" to become operational by 1 January 2010. The move had not enthused taxpayers, as it would have entailed a slew of new formalities for them to obtain the new number and file their returns on time. Under the bureaucratic Indian dispensation, things that look simple on paper are never that simple in practice.

The decision to shelve the UTN was taken in view of the approaching end of the fiscal year. The exercise to have a new identity number like PAN is huge and it would have brought a lot of complications for taxpayers, the finance ministry official said.

The UTN was supposed to be issued by the company or person who deducted or cut tax before making any payment to the taxpayer. But, with not enough time before the last day of filing returns, companies didn't have the mechanism to generate UTN and distribute it to the people concerned.