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The government will invalidate all PAN cards that are not linked to Aadhaar by September 1. At the moment 180 out of the existing 400 million PAN cards are not linked to Aadhaar.
To validate and continue using the existing PAN cards, citizens will have to link them to Aadhaar. Or else, they will be permitted to use Aadhaar instead for filing returns and while making other high-value transactions, specified under the Income Tax Act. Those who cite an Aadhaar number, which is not already linked to a PAN number, for tax returns and other specified transactions after September 1, will get a fresh one from the Income Tax Department.
This is how the Aadhaar-PAN linkage, proposed in the Finance Bill, 2019 will be rolled out.
The Budget fine print also reveals the amended I-T Act would put the onus on the person receiving any document relating to specified high-value transactions or tax returns, to ensure that the PAN or the Aadhaar number are duly quoted, and as importantly “authenticated”.
The budget document says, “In order to protect validity of transactions previously carried out through such PAN, it is proposed to amend the said proviso so as to provide that if a person fails to intimate the Aadhaar number, the PAN allotted to such person shall be made inoperative in the prescribed manner.”
In Budget 2017, it was announced that PAN must be mandatorily linked with Aadhaar or else, it will become invalid. The Central Board of Direct Taxes (CBDT) in its notification dated March 31, 2019 notified the date i.e. 30 September, 2019 by which PAN must be linked with Aadhaar.
In addition to this, individuals are mandatorily required to link PAN with Aadhaar while filing ITR. This amendment replacing the word ‘invalid’ with ‘inoperative’ will come into effect from September 1, 2019.
Budget 2019 has also proposed the inter-changeability of PAN and Aadhaar for ensuring ease of compliance. This means that every person entering into a transaction where it is mandatory to furnish or quote his/her PAN as per the law but have not been allotted a PAN but possess the Aadhaar number can quote the Aadhaar instead of PAN.
The Government has also declared another important update: if an Aadhaar card is used for a transaction, and it hasn’t been linked to the PAN card, the old PAN will be invalidated and a new PAN number will be assigned from the Income Tax Department.
As of now, there are about 43 crore PAN card holders in India and 120 crore Aadhaar card holders, of which 18 crore PAN cards have not been linked to Aadhaar cards. This means that if not linked before September 1, more than 20 crore PAN cards will be invalidated.
With all the latest developments going on about the PAN and Aadhaar card, there is a definite possibility that India will soon be a country where every citizen will have a single social number on which every transaction and other details will be registered.
If you haven’t linked your PAN card to your Aadhaar card yet, get it done by September 1! See detailed instructions on how to link your PAN Aadhar.
If you are unable to link your PAN and Aadhaar using the e-filing website of the department then there are other ways for linking PAN and Aadhaar. Central Board of Direct Taxes (CBDT) in its notification dated June 29, 2017 has provided other methods to link PAN and Aadhaar other than the methods mentioned above.
The format is: UIDPAN<SPACE><12 digits Aadhaar><SPACE><10 digits PAN>
As per the above mentioned notification, CBDT has provided for a manual method as well to ease the problems of taxpayers in case the person is unable to sort out the problem of mismatch in the data of PAN and Aadhaar through other methods.
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