Just when we were done waiting in lines after demonetisation, GST Bill and making Aadhar mandatory for almost all the legal transactions, the government just had another trick up its sleeve. What is up with PAN card and Aadhar now?
PAN card made by businesses, institutions or individuals as proof of their income over the year now needs to be linked with the Aadhar card before March 31, 2020. Permanent Account Number card is a 10 digit alphanumeric number which is issued by the Income Tax Department. It is mandatory for every taxpayer in the country.
The Income Tax department in their latest announcement has clearly stated that PAN will become non-functional if it is not linked with the Aadhar card latest by March-end.
According to the latest statistics, only 30.75 crores PAN had been linked to Aadhar till January 2020; however, nearly 17.58 crore PANs are yet to be linked.
The repercussion of not linking PAN to Aadhar includes not being able to perform transactions including sale or purchase of a vehicle, applying for debit/credit card facilities, opening a Demat account among other services. Along with this, any person with an inoperative PAN card will be liable for all consequences under the Income Tax Act.
The Supreme Court had in September 2018 declared Aadhar as constitutionally valid and mandatory for furnishing of Income Tax returns and allotment of PAN cards.
Under Section 139AA of the Income Tax Act, all the individuals having PAN card along with the new cardholders must link to Aadhar card for the financial year 2019-2020.
Why is it essential to link PAN and Aadhar?
- Getting rid of Fake PAN card – It is vital to remove the fake PAN cards to prevent individuals from paying less tax by window dressing their income statements
- To identify tax evaders – PAN is a mandatory KYC requirement for Bank account opening, thereby linking it with Aadhar, it will get linked to their bank account as well.
- Stopping Black Money movement – Stop activities which promote the circulation of illegal money generated from money laundering, drug trafficking and others.
- Easier to file returns – It would allow the taxpayers to directly file the Income Tax Returns by just furnishing the Aadhar number once they are linked together, thereby removing the hassle in the process.
It’s time you rush and link your Aadhar to PAN to get rid of all the unwanted knots that might hook you, if not linked.