Both the PAN card as well as the Aadhaar card is unique identification cards that serve as proof of identity that are necessary for registration and verification purposes. The Income Tax Department has in the recent past made various efforts and provided tools to link Aadhaar with PAN.
Aadhaar has been made mandatory for applying for PAN with effect from July 1. The department, as per latest data, has linked over 2.62 crore Aadhaar numbers with its PAN database. There are over 25 crore PAN numbers allotted, while Aadhaar has been allotted to about 115 crore people.
Methods of linking PAN card to Aadhaar
- Online – A facility available on the Income Tax Department’s e-filing website enables assessees with identical names given on Aadhaar and PAN as well as those with a minor mismatch to link the two identities. The steps to carry out this task through the portal is as follows –
- In the e-filing website – https://incometaxindiaefiling.gov.in/ , click on the ‘Link Aadhaar’ option on the left hand side.
- Enter your PAN, Aadhaar and name given on the Aadhaar Card. The name detail to be filled in this step is case sensitive.
- Click on ‘Link Aadhaar’ button to proceed. An OTP or one-time-password will be sent to the mobile number registered with Aadhaar.
- The Income Tax Department has specified in detail the procedure for quoting of Aadhaar in new PAN application and for changes or correction in PAN data.
- 2. SMS – For all individuals whose name given in the Aadhaar card and PAN card are identical, a simple SMS-based facility has been provided. Such assessees need to send an SMS to 567678 or 56161 in the following format:
- UIDPAN<12-digit Aadhaar><10-digit PAN>
For example: UIDPAN 111100003333 AAAPA8888Q
- However, in case of assessees whose names given in the Aadhaar and PAN cards have a “minor mismatch”, the taxman has said, the linking can be achieved using an online facility.
- 3. Physical Form – To apply for linking Aadhaar and PAN through a pen-and-paper mode, individuals will be required to mention both PAN and Aadhaar numbers on the form. They will also have to furnish two signed declarations.
- One will say that the Aadhaar provided in the application form has not been used for linking it with “any other PAN”, while another will state that the individual has “not been allotted any other PAN than the one mentioned” on the form.
- The linking of Aadhaar with PAN can also be carried out by personally visiting a PAN Service Center.
It has said to the PAN and e-filing service providers that they “shall ensure that the identity of information of Aadhaar holder, demographic as well as biometric, is only used for submission to the central identities data repository of the UIDAI for Aadhaar authentication purpose”.
Importance of Linking PAN Card with Aadhaar Card
Both the PAN card as well as the Aadhaar card is unique identification cards that serve as proof of identity that are necessary for registration and verification purposes.
Prevent Tax Evasion:
By linking the Aadhaar and PAN cards, the government will be able to keep tabs on the taxable transactions of a particular individual or entity, whose identity and address will be verified by his Aadhaar card. This will effectively mean that every taxable transaction or activity will be recorded by the government.
As a result, the government will already have a detailed record of all the financial transactions that would attract tax for each entity, making tax evasion a thing of the past.
Multiple PAN Cards:
Another reason for linking PAN with Aadhaar is to reduce the occurrence of individuals or entities applying for multiple PAN cards in an effort to defraud the government and avoid paying taxes.
By applying for more than one PAN card, an entity can use one of the cards for a certain set of financial transactions and pay taxes applicable for those. Meanwhile, the other PAN card can be used for accounts or transactions that the entity wishes to conceal from the Income Tax department, thereby avoiding paying tax on them.
By linking the PAN and Aadhaar card, the government will be able to link the identity of an entity through his/her Aadhaar card, and subsequently have details of all financial transactions made through the linked PAN card. If there are multiple PAN cards registered under the same name, the government will be able to identify the same and take corrective action.
Ease in Filing of Income Tax Returns:
Entities that have linked their PAN and Aadhaar cards will be able to file their e-Returns or their online Income Tax returns seamlessly and quickly. By linking the two, entities will no longer have to submit their Income Tax acknowledgement to the IT department, thus saving tax payers a lot of trouble.
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