Aadhaar card can be used for cash transactions beyond Rs 50,000 in place of PAN card

In Budget 2019, The Finance Minister Nirmala Sitharaman has proposed to allow the interchangeability of PAN and Aadhaar for the ease of compliance of taxpayers.
 

The Banks and other institutions would make backend upgrades for allowing acceptance of Aadhaar in all places where quoting PAN is now compulsory.
 

India's national biometric ID Aadhaar could now be quoted for cash transactions of above Rs 50,000, from bank accounts in place of PAN, and all other purposes where usually income tax PAN number was a must.
 

If an individual hasn't linked their Aadhaar to their PAN cards they have time till September 1 to finish the task. However, after that, the government would discredit the PAN cards which are not linked with Aadhaar. 
 

In case, if the PAN card becomes invalid, then also the individual would have the option of using the Aadhaar for filing returns as well as can make high-value transactions. After September 1, whose Aadhaar number is not linked towards a PAN number, for them, a new PAN card will be issued through the Income Tax Department. The automatically generated new PAN number could then be downloaded online.
 

As per the amended I-T Act, it is the duty of the receiver of the documents of high-value transactions of tax returns towards checking that the PAN or Aadhaar number related is accordingly quoted and authenticated. This was stated clearly in the new Sub-Section (6B) of the Finance Bill that states that 'authentication' could be understood as the procedure through which the permanent account number or Aadhaar number along with demographic information or biometric information of a person is submitted to the income-tax authority or such other authority or agency as might be set for its verification and such authority or agency confirms the correctness, or the lack if any, on the grounds of information available with it.
 

The Central Board of Direct Taxes, in March, has extended the last date to link the PAN and Aadhaar to 30th September. However, it was made mandatory to quote and link Aadhaar number to file income tax returns from April 1.

The new Aadhaar card and PAN card rules

India's national biometric ID Aadhaar could now be quoted for cash transactions of above Rs 50,000, from bank accounts in place of PAN, and all other purposes where usually income tax PAN number was a must.
 

The Banks and other institutions would make backend upgrades for allowing acceptance of Aadhaar in all places where quoting PAN is now compulsory. This follows that In the Budget 2019, The Finance Minister Nirmala Sitharaman allowed the interchangeability of PAN and Aadhaar for the ease of compliance of taxpayers
 

Once this suggestion gets the approval in the Parliament, individuals would be able to use Aadhaar cards in place of PAN cards towards conducting financial transactions, for example, mutual fund investments, buying gold, and others. This move is intended at improving tax compliance as well as eases the procedure of tax payment for taxpayers.
 

The Central Board of Direct Taxes (CBDT) Chairman has stated that through the new arrangement for linking the two databases, the tax authorities would themselves allocate a new PAN to individuals who file their I-T returns using their Aadhaar card. The Chairman of CBDT also stated that the PAN is "certainly not dead" furthermore the Finance Minister's proposal concerning the interchangeability of the two databases is an "additional facility" which would assure their linkage as it is mandatory under the law. Also, it was said that if Aadhaar is being furnished and PAN is not there, CBDT may allot a PAN to the individual (who is filing an income tax return).
 

Presently, it is compulsory to quote PAN number for filing ITR without which the tax cannot be filed. And, this year during April, the government had amended the rule and made linkage of Aadhaar as well as PAN number compulsory for filing ITR returns. 
 

Finance Minister Nirmala Sitharaman in her Budget 2019 stated that for the ease and convenience of taxpayers, she proposes to make PAN and Aadhaar interchangeable and allow those who don’t have PAN to file Income Tax returns through simply quoting their Aadhaar number and also make use of it wherever they are required to quote PAN.
 

Section 139 AA (2) of the Income Tax Act states that every individual having PAN as on 1st July 2017, are qualified to obtain Aadhaar, and should intimate his Aadhaar number towards the tax authorities.
 

After the Supreme Court upheld Section 139AA of the I-T Act, the government during March has extended the deadline for linking PAN with biometric ID Aadhaar by 6 months till September 30.
 

However, quoting of Aadhaar is compulsory for filing income tax returns (ITRs), as per the Supreme Court order.
 

The Supreme Court, in last year, had acknowledged that the Centre's flagship Aadhaar scheme as constitutionally valid and held that the biometric ID shall remain compulsory for filing of I-T returns and allotment of PAN.
 

PAN Card
 

Under the supervision of the Central Board of Direct Taxes, PAN is a unique 10-digit alphanumeric identity given to each taxpayer through the Income Tax Department. It also serves as an identity proof. PAN is compulsory for financial transactions, for example, receiving a taxable salary or professional fees, sale or purchase of assets above stated limits, buy mutual funds and more.
 

To curb black money, quoting of PAN is compulsory for cash transactions, like in a hotel or foreign travel bills, surpassing Rs 50,000. PAN is also compulsory on purchase of immovable property of over Rs 10 lakh.
 

Aadhaar Card
 

Aadhaar is a 12-digit number issued through the Unique Identification Authority of India (UIDAI) towards the residents of India. It is backed by biometric data of individuals
 

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Author:

eStartIndia Team