Many ambiguities regarding Aadhaar’s role in the return filing continue to remain, mainly because of the court decision that PAN is indeed valid even though Aadhaar is not obtained and connected to PAN. This article attempts to explain the topic in this relation.
Aadhaar Latest News:
On Tuesday, the government extended the deadline for linking Aadhaar to PAN till 30 June 2020. Due to the coronavirus pandemic, the decision to extend the time limit was taken. Aadhaar-PAN was previously scheduled for 31 March 2020.
Check Reasons for Why to Link PAN and Aadhaar
The PAN and the Aadhaar cards are unique identification cards that provide proof of identity for registration and verification needs.
The government urged all groups to attach their PAN cards to their Adhaar cards. This is majorly done for the following reasons.
Avoid Paying Taxes
With Aadhaar-PAN linkage, the government will keep tabs on the taxable transactions of a single individual or organization whose identification and address would be checked with their Aadhaar card. This ensures that the government documents all commercial sales or events.
As a result, all financial transactions that would impose a tax on each entity, making tax evasion a thing of the past, will have been detailed in records.
Multiple PAN Cards:
Another reason why PAN should be linked with Aadhaar is to reduce the incidence of people or entities requesting multiple PAN cards in an attempt to defraud the government and prevent paying taxes.
A company can use one card for a particular set of financial transactions by applying for several PAN cards and paying taxes. The other PAN card may, in the meantime, be used for accounts or deals that the entity wants to disguise from the Income Tax Department and thus avoid tax payments.
With PAN-Aadhaar linking facility, the government can link a company’s identity through its Aadhaar card and then have information on all financial transactions made via the linked PAN card. If several PAN cards are issued with the same name, the government needs to recognize and make corrections.
New Rules That Every Individual Should Know about PAN and Aadhaar
There have been several improvements to the PAN and Aadhaar implementation in the 2019 Union Budget. The Finance Minister, Smt. Nirmala Sitharaman has proposed a set of new rules as follows:
- Quote Aadhaar for cash transactions above Rs.50,000: Before, senders had to quote their PAN number for transactions higher than Rs.50,000. But instead, you can quote the Aadhaar number now. Banks and all other institutions will update their systems to accept Aadhaar details for previously required PAN information transactions.
- Deposit or withdraw cash: You can now use your Aadhaar details to withdraw or deposit amounts higher than Rs.50,000.
- Linking Aadhaar-PA: The tax authorities will assign a new PAN to those who file they’re IT returns using their Aadhaar Card.
- Aadhaar based ITR Filing: You can now register your income tax returns with Aadhaar even though you don’t have a PAN card.
Some cases do not, however, allow these details to be used interchangeably. This applies to cash transactions in hotels or in connection with foreign travel bills (transactions must exceed Rs. 50,000). Also, if you want to buy a property with a value higher than Rs. 10 lakh, you require PAN card details.