Recently, the finance minister announced the interchangeability of Aadhaar and PAN.
The Ministry of Finance has made a proposal in the parliament which will allow individuals to use Aadhaar cards instead of Permanent Account Number (PAN) to file income tax returns. Once the proposal is approved, Aadhar card will also be utilised for conducting financial transactions, mutual fund investments, buying gold, and others.
Reportedly, this was announced by the Union Finance Minister Nirmala Sitharam during the 2019 Budget Session. She stated that “More than 120 crore Indians now have Aadhar card, therefore for ease of taxpayers, I propose to make PAN and Aadhaar interchangeable and allow those who don't have PAN to file returns by simply quoting Aadhaar number and use it wherever they require to use PAN."
This step is aimed at improving tax compliance and to ease the process of filing income tax returns. Earlier, it was mandatory to quote PAN number for filing income tax returns without which an individual cannot file taxes. In April 2018, the government made linkage of Aadhaar and PAN card mandatory for filing income tax returns. Now, you can simply furnish your Aadhar card in any bank for making transactions beyond Rs. 50,000 in place of PAN card. For instances, (new applicants) where Aadhaar is being furnished, the tax authorities will themselves allocate a new PAN to people who file their IT returns using theirAadhar card.