Your PAN number will be Invalid and you will not able to file Tax Return, if not linked to Aadhaar card by 1 July 2017
How smartly the government has used Aadhaar to reduce corruption from direct benefit transfer for LPG in which the subsidy on LPG cylinders will be credited directly to consumers’ Aadhaar-linked bank accounts, KYC verification process to recently launching “Aadhaar Pay” on 14th April 2017, a payment system which will enable people to carry out bank transactions just by using their thumb impressions. While the law had empowered the Centre to mandate use of Aadhaar in most of the center funded schemes, since then the corruption level has significantly reduce. In recent Finance Act 2017 government has mandated use of Aadhaar for filing returns and linking of all existing PAN Number with Aadhaar Number.
What changed in Finance Act 2017, in Income Tax Act in relation to Aadhaar card?
The government has introduce new section 139AA which makes it compulsory to quote Aadhaar number at the time of filing of Income Tax Returns and for applying for PAN card with effective from 1 July 2017. The Finance Act 2017, has introduce new section 139AA which says
“Every person who is eligible to obtain Aadhaar number shall, on or after the 1st day of July, 2017, quote Aadhaar number—
(i) in the application form for allotment of permanent account number;
(ii) in the return of income”
So quoting of Aadhaar number will be compulsory from 1 July 2017 for filing of IT returns or applying of New Pan Card
What if you have applied for Aadhaar Number, but your application is still in process?
Section 139AA further states that
“Provided that where the person does not possess the Aadhaar number, the Enrolment ID of Aadhaar application form issued to him at the time of enrolment shall be quoted in the application for permanent account number or, as the case may be, in the return of income furnished by him”
So in case you have applied for Aadhaar and not the got the number you can still use Enrolment ID of Aadhaar application form and file your income tax return and apply for PAN
What if you already have PAN card and not apply for Aadhaar Card
Section 139AA further states that
“Every person who has been allotted permanent account number as on the 1st day of July, 2017, and who is eligible to obtain Aadhaar number, shall intimate his Aadhaar number to such authority in such form and manner as may be prescribed, on or before a date to be notified by the Central Government in the Official Gazette
Provided that in case of failure to intimate the Aadhaar number, the permanent account number allotted to the person shall be deemed to be invalid and the other provisions of this Act shall apply, as if the person had not applied for allotment of permanent account number.”
Currently there is facility in E Filing portal to register and link your Aadhaar Card with PAN card and E filing Account. Aadhaar and Permanent Account Number must be linked. In case, they are not linked, then the PAN will get invalid and cancelled.
Why Aadhaar made Mandatory for Filing Returns and Linked with PAN
At present, there are 250 million PAN cards that are mandatory for cash transactions of hotel or travel bills exceeding Rs 50,000. It is also mandatory to quote the number for purchase of jewellery above Rs 2 lakh either in cash or by plastic money, and while making large deposits in banks. But the government says many of those PAN cards are duplicates or obtained through fraud PAN cards have been misused by certain people to evade taxes. Linking Aadhaar will ensure no one misuse PAN number and can also help in tracing money launderers.
The compulsory seeding of all PAN cards with an Aadhaar number solves many of these problems. Once this is done, no individual can have more than one PAN card, which will give the taxman 360-degree view of all potential taxpayers who quote PAN or Aadhaar.
Government is considering issuing PANs on real time basis using Aadhaar biometric. Income Tax department is considering issuing of Permanent Account Number (PAN) on a real time basis using Aadhaar’s e-KYC facility.
What is the Procedure for Linking PAN Card and Aadhaar Card?
In order to link PAN and Aadhaar cards, individuals have to register on the Income tax e-Filing portal and follow the following steps
- Log in to the e-Filing account by entering the log-in ID, password and date of birth
- On logging in to the site, a pop up window will appear, prompting you to link your PAN card with Aadhaar card.
- Details such as name, date of birth and gender will already be mentioned as per the details submitted at the time of registration on the e-Filing portal.
- Verify the details on screen with the ones mentioned on your Aadhaar card.
- If the details match, enter your Aadhaar card number and click on the “link now” button.
- A pop-up message will inform you that your Aadhaar card has been successfully linked to your PAN card
What should be done if details as per my PAN card do not match with Aadhaar card?
If the details on your PAN card such as spelling of name, date of birth or gender do not match the ones on your Aadhaar card, then you have to submit change the details in Aadhaar or PAN card and then link the account.
Do NRI need to link PAN card with Aadhaar Card? No if Individual is Non Resident as per Income Tax and Aadhaar Act
The press release on 5th April 2017 clarified that mandatory quoting of Aadhaar or Enrolment ID shall apply only to a person who is eligible to obtain Aadhaar number. As per the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, only a resident individual is entitled to obtain Aadhaar. Resident as per the said Act means an individual who has resided in India for a period or periods amounting in all to one hundred and eighty-two days or more in the twelve months immediately preceding the date of application for enrolment. Accordingly, the requirement to quote Aadhaar as per section 139AA of the Income-tax Act shall not apply to an individual who is not a resident as per the Aadhaar Act, 2016
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