Once the latest Union Budget 2019 announcement is passed in the Parliament, everyone will be able to conduct financial transactions using Aadhaar card instead of PAN card. For instance, ITR filing, mutual investments and even buying gold could be possible with an individual’s Aadhar card number.
According to the Union Budget 2019 announcement, people without PAN (Permanent Account Number) will also be able to file ITR (Income Tax Return) using their Aadhaar Number.
Since more than 120 crore Indian are issued the Aadhaar card, Finance Minister Nirmala Sitharaman had proposed an offer in Union Budget 2019 to make PAN and Aadhaar cards interchangeable. This will enable people without PAN card to make IT returns or other financial transactions by quoting their Aadhaar number.
This move aims at increasing the number of taxpayers in the country with the process of lining the two databases together.
Currently, the PAN card number is mandatory for individuals who file ITR regularly. Without PAN, the tax return cannot be filed. This year, in April, the central government has further amended the rules for tax filing. According to the new set of rules, every Indian resident and Indian NRIs must link their Aadhaar and PAN cards for easy filing of IT returns.
Here are the key things that every Indian must know about the new PAN, Aadhaar rules:
- Reported by ETV Bharat, the Indian Finance Minister proposed in Union Budget 2019 that Aadhaar can be quoted for financial transactions of over INR 50,000. All banks and other financial institutions will have to make backend upgrades for enabling the acceptance of Aadhaar in every place where PAN card number was mandatory.PAN means an individual’s unique identity via 10-digit alphanumeric characters, which are mandatory for taxpayers at the time of ITR filing. This 10-digit identity is allotted by the Central Board of Direct Taxes. It even serves as an individual identity proof.
- According to ETV Bharat news today, the fresh allotment “suo motu” of new PAN will be done for every person who files IT returns with only Aadhaar card. As per the new arrangement, these two important documents will be linked through databases. The chairman of the Central Board of Direct Taxes (CBDT), Pramod Chandra Mody, mentioned that the PAN “will not be dead.” The latest Budget announcement for the interchangeability of these two databases is only an “additional facility” for India citizens to make sure that their linkage is mandatory under the law.
- Mr. Modi also mentioned that in places where Aadhaar is quoted but PAN is not there, a new PAN will be allotted to the person (who is filing the income tax return). This will ease up the compliance of taxpayers in the process of interchangeability of PAN and Aadhaar cards.
- Aadhaar is a 12-digit number, which is issued to an individual by the Unique Identification Authority of India (UIDAI). Aadhaar card is mandatory for all residents of India. It is also backed by an individual’s biometric data. As per the new rules, the central government has also proposed to consider Aadhar card allotment to NRIs (having Indian passports) on the arrival to the country, without having to wait for the mandatory 180 days.
- According to ETV Bharat News Delhi experts, the latest Union Budget announcement to make PAN and Aadhaar interchangeable for ITR filing will increase taxpayer base. Since Aadhar has a wider coverage compared to PAN – meaning there are more Aadhaar cards issued to individuals than PAN cards – so this will be a great benefit for increasing the tax liability of individuals.