Aadhaar linkage mandatory for PAN & filing ITR, not for bank accounts

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October 02, 2018 12:11 AM

Aadhaar was introduced by the government with the primary objective of providing unique identity to its residents so as to discourage the emergence of any duplicate or bogus identity.

Aadhaar linkage mandatory for PAN & filing ITR, not for bank accounts

Aadhaar was introduced by the government with the primary objective of providing unique identity to its residents so as to discourage the emergence of any duplicate or bogus identity. The intended purpose was also to identify the beneficiaries to ensure targeted delivery of different subsidies, benefits, services, grants, wages and other social benefit schemes, which had become a challenge for the government. With the evolution of Aadhaar, its applicability was broadened to carve out the maximum benefit from the Aadhaar project. Linking Aadhaar with permanent account number (PAN) and bank accounts was made mandatory.

The concept of unique identification became a matter of debate when challenges emerged in its application, giving a major concern over the data privacy of the citizens. Doubts hovered over the constitutional validity of the Aadhaar Act as it seemed to be in contradiction with the right to data privacy. The extension of applicability of Aadhaar could not be seen as an aid in facilitation of benefits to the targeted citizens.

Rather, it increased the complexity and became a threat to national security. Furnishing Aadhaar for school admissions served no purpose of welfare but burdened the citizens with an additional formality. The menace arose when fingerprint authentication could not be done in ration shops depriving the citizen from basic essentials.

Apex court verdict
Bringing this saga of data privacy to an end, the Supreme Court’s five-member bench verdict upheld its constitutional validity but removed the obligation to mandatorily obtain Aadhaar for certain purposes. The life of an individual has been made simpler as Aadhaar would be mandatorily required to be furnished only in cases where any benefit from consolidated funds of India are being granted to the citizens. The verdict has struck off various provisions in the Aadhaar Act, thereby, restricting the application of Aadhaar.

Linking bank accounts not needed
Now, no individual can be denied benefits by private companies for not furnishing the Aadhaar number. Bank accounts cannot be frozen just because these are not linked to the Aadhaar number. Earlier, many people who did not link their Aadhaar number with phone numbers had trouble getting their SIM card replaced. The Supreme Court has removed unnecessary obligations and limited the mandatory requirement of Aadhaar to government benefits.

Aadhaar number shall not be required to be furnished in case of school admissions, taking CBSE, NEET, JEE or UGC exams. Also, it is not required to be furnished for opening a bank account. Individuals shall be allowed to file a compliant against the misuse or leakage of their data.

Irrespective of the changes brought in by the Supreme Court verdict, Aadhaar number holds validity in its originality. Obligation to furnish Aadhaar while applying for PAN continues along with the mandatory linkage of existing PAN for filing ITR. Though there is no denying the fact that Aadhaar can help India take the stride into a digital economy, at the same time, we need to be better prepared with an advanced data privacy law before we take that stride.

The writer is executive director, Nangia Advisors LLP. Inputs from Radhika Arora

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