BRIEF- Linking of Aadhar with PAN Card:
The Government has mandated use of Aadhaar Number in most of the Subsidy Schemes where the benefit of Subsidy is directly transferred to beneficiary instead of the earlier practice of through Suppliers. This has resulted in plugging leakages in Subsidies, benefits of subsidy directly to those who are eligible, targeted delivery of subsidy and less burden of subsidy on Government Exchequer. To take the advantage of power of AADHAAR in curbing the malpractices related to the use of PAN, the Government has decided to compulsorily of Linking of Aadhar with PAN Card.
INTRODUCTION- Linking of Aadhar with PAN Card made Mandatory
In order to curb the loopholes in using the Duplicate PAN Numbers, the Government has w.e.f. 1st July, 2017, mandated use of Aadhaar Number along with PAN. Now, if you do not have Aadhaar Linked to PAN, your PAN will be deemed to be invalid. Hence, from 1st July, 2017, PAN will go along with Aadhaar in order to continue it to be VALID.
Some of the common questions concerning Linking Aadhar Card with PAN are answered below for the benefit of readers:
Q 1. WHO IS LIABLE TO QUOTE AADHAR?
Every individual, who has resided in India for 182 days or more in the last 12 months, immediately preceding the date of application for Aadhaar, is liable to Link AADHAAR NUMBER TO PAN.
Q 2. WHERE THE AADHAR TO BE QUOTED?
The Government via Finance Act, 2017, has introduced Section 139AA, wherein quoting of Aadhar Number is made compulsory:
- In Application Form for New PAN
- In the Return of Income (ITR)
- In the IncomeTax Efiling Account (subject to Government Notification)
Q 3. WHAT IS AADHAAR IS APPLIED FOR AND AADHAAR NUMBER IS NOT ALLOTTED?
If Aadhaar is applied for and Aadhhar Number is not allotted, Enrollment ID in the Slip of Application of Aadhaar Number shall be quoted.
Q 4. WHAT IF AADHAR IS NOT LINKED TO PAN?
If the AADHAAR is not linked to PAN, the PAN Number will not be considered as Valid. Further, the income Tax Act will apply to that person as if that person has not applied for PAN at all.
Q 5. WHAT IF PAN BECOMES INVALID?
If Aadhaar is not liked to PAN and PAN becomes Invalid, some illustrative lists of transactions, which are not allowed to be done, are as follows:
- Buying any Motor vehicle (other than two wheelers)
- Opening an account with any Bank / NBFC / Co-Operative Bank (other than Basic Saving Bank Account)
- Applying for Debit / Credit Card
- Opening a DEMAT Account
- Payment of Hotel / Restaurant Bill exceeding Rs. 50,000
- Payment for travel to Foreign Country / Foreign Currency exceeding Rs. 50,000
- Buying Mutual Fund exceeding Rs. 50,000
- Buying Debentures / Bonds exceeding Rs. 50,000
- Deposits in cash with any bank / co-operative bank exceeding Rs. 50,000
- Buying Life insurance Policy, with yearly premium exceeding Rs. 50,000
- Sale / Purchase of unlisted Shares exceeding Rs. 1,00,000 per transaction
- Sale / Purchase of Immovable Property exceeding Rs. 10 Lacs
- Sale / Purchase of any Goods/ Services exceeding Rs. 2 Lacs per transaction
Hope you will comply with the good intention of Government in order to help it to curb mal practices related to the use of PAN and consequently, to curb the black money.
(Disclaimer: Before taking any action on the basis of above information, one is advised to take legal opinion from a learned tax practitioner. The author is not liable for any action done on the basis of above information / opinion)
Related Read- Penalties for having more than one PAN Card
(The author is a practicing Chartered Accountant and can be reached at [email protected] )