Under the new Income Tax Rules, PAN cards and Aadhaar cards will be made interchangeable soon. Read ahead to know more.
Aadhaar card has now become an absolute necessity for an Indian citizen. Aadhaar Card is the official ID/Address proof of an Indian citizen. An Aadhaar card comprises of a 12-digit unique identification number along with a QR code which holds an individual’s demographic and biometric data. Reportedly, PAN Cards and Aadhaar Cards will be made interchangeable for income tax return filling. This was announced in the 2019 Union Budget. Currently, it is mandatory to furnish both (PAN and Aadhaar) for filing an ITR.
In addition to this, finance minister Nirmala Sitharaman stated, “for ease and convenience of taxpayers, I propose to make PAN and Aadhaar interchangeable and allow those who do not have PAN to file Income Tax returns by simply quoting their Aadhaar number and also use it wherever they are required to quote PAN".
If this decision comes into effect, it will have the following implications on every taxpayer.
If an individual taxpayer has got both cards (PAN and Aadhaar) which are linked to each other, he/she has the option to select Aadhaar instead of PAN under the Income Tax Act, 1961.
If an individual taxpayer does not have a PAN card, the Income Tax Department can allot PAN to a person on the basis of their Aadhar card post obtaining demographic and biometric data from UIDAI (Unique Identification Authority of India).
In order to curb tax evasion, the Income Tax Department has made it mandatory to provide the quoting and authentication PAN/Aadhaar card for certain high-value transactions. Also, the person receiving the following documents will be required to check the correct quoting and authentication of PAN/Aadhaar card for the same high-value transactions. Failure to adhere to these provisions will result in massive penalties.
Currently, it is mandatory to link PAN with your Aadhaar card. The Income Tax Department has proposed that if a person fails to intimate the Aadhaar number, the PAN allotted to such person will be made inoperative.