Linking of taxpayers’ Aadhaar number with the PAN card has now been made mandatory by the Income Tax Department. They have to do it latest by today, ie, 31st August, 2017, which is the deadline for linking the two, unless the government decides ti extend the deadline further. If someone fails to do so, then one’s income tax return will not be taken up for processing u/s 143(I) of the Income Tax Act. One will also not be able to take advantage of many other benefits of Aadhaar-PAN linking.
It is already known that there are numerous advantages of having Aadhaar and PAN cards. For instance, apart from helping you in filing your income tax return, your Aadhaar number will also help you in applying for a PAN card and getting pension through the Employees’ Provident Fund. It will also help you get LPG subsidies and avail the benefit of many other social schemes. Aadhaar card has also been made mandatory by the Ministry of External Affairs for availing passport services.
Similar is the case with PAN card which, apart from taxation purposes, is now required for doing so many things, like opening a bank account, at the time of sale or purchase of any immovable property valued at Rs 5 lakh or more or sale or purchase of a motor vehicle, and many other financial transactions.
Apart from these, Aadhaar-PAN linking has its own advantages. For instance, besides helping one in tax filing, it will also help the government curb black money.
“Linking of the Aadhaar number with the PAN card is part of the government drive against black money. It is also part of the Digital India initiative in which all government records are to be digitalised,” says Ashish Kapur, CEO, Invest Shoppe India Ltd.
This achieves the following benefits:
1) Removes the chances of the same individual having more than one PAN card. “This was a major source of tax evasion and multiple cards were proving to be a major hurdle in improving tax compliance. Besides tax evasion, multiple PAN cards were also being used to defraud banks,” informs Kapur.
2) Having a link with Aadhaar will enable the Income Tax Department to a establish an efficient and meticulous surveillance system of detecting tax evasion. This is because Aadhaar number can enable easy access to the IT returns filed sequentially as well as other details for an individual.
3) This linkage will also ease filing of income tax returns as assesses need not show the receipt of the return to the IT authorities.
4) Linking your Aadhaar number with the PAN card will help avoid cancellation of your PAN card.
5) Aadhaar-PAN linking will help one having a summarized detail of one’s taxes attached to one’s unique identification number for future reference.
“The Aadhaar-PAN linkage will be a very important step in formalising the economy and reducing cash transactions. As the parallel economy gets squeezed, India’s tax collections and credit rating should both improve. Hence this is a very important step towards achieving higher economic growth and giving stability to our country,” says Kapur.