Aadhaar can be used in place of PAN; here is what you need to know, union budget, nirmala sitharaman
(Representative Image)

Income Tax return filing has now been made easier. Union Finance Minister Nirmala Sitharaman in her budget speech last week announced that the taxpayers, who don’t own a PAN (Permanent Account Number) card, can now file the Income Tax with their Aadhaar Card.

“Mr Speaker, Sir, more than 120 Crore Indians now have Aadhaar. Therefore, for ease and convenience of taxpayers, I propose to make PAN and Aadhaar interchangeable and allow those who do not have PAN to file Income Tax returns by simply quoting their Aadhaar number and also use it wherever they are required to quote PAN” she said.

Now, when she said “interchangeably”, it means that the Aadhaar, 12 digits biometric number assigned to residents, that is used to claim various welfare schemes; can be used in place of PAN, issued by the Income Tax Department used to be quoted in significant financial transactions for financial transactions and while filing your income tax returns, but not vice-versa.

You cannot use your PAN in place of Aadhaar for welfare benefits or document that can be used for any interaction, whether with the state or a private organisation where it is mandatory.

Few days after this announcement, revenue secretary Ajay Bhushan Pandey made it clear that Aadhaar can now be quoted for cash transactions of more than Rs 50,000 where quoting PAN, was mandatory.

But there is no possibility that PAN will be phased out. Regardless of the fresh announcement, the deadline for PAN-Aadhaar linking is September 30, 2019.

The Aadhaar law says that if PAN is not linked to an Aadhaar number by that date, it will be “inoperative”.

The government in March extended the deadline for linking PAN with Aadhaar by six months after the Supreme Court upheld Section 139AA of the Income Tax Act.

The linking which government still considers mandatory but the proposal to quote Aadhaar in place of PAN is not aimed at those who do not want to link Aadhaar and PAN, instead, it is purposive at those who have Aadhaar but do not yet have a PAN card.


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