No Aadhaar? PAN may be invalid Demonising UID is not going to solve any issue: Nilekani
NEW MOVE SBI group’s chief economic adviser says linking both systems will allow seamless integration of tax collection, taxpayers
Permanent account number (PAN) is likely to become invalid after December 31 this year if people fail to obtain or apply for an Aadhaar card by then, top finance ministry sources have told HT.
All taxpayers need to have PAN to be able to file income tax returns, but there are numerous others, especially students outside the tax bracket, who have been using this unique number as proof of identity.
Indicating that Aadhaar will be made mandatory for all income tax-related issues, finance minister Arun Jaitley said in Parliament that 98% of adult Indians already have Aadhaar numbers. At present, there are 108 crore Adhaar cards.
State Bank of India group’s chief economic adviser Soumya Kanti Ghosh said the idea to link PAN with Aadhaar will allow seamless integration of tax collection and tax payers, while throwing light on people receiving government benefits.
“Considering that 98% of the adult population in the country consists of Aadhaar card holders, a timeframe till the end of the year is more than adequate for linking PAN with Aadhaar,” Ghosh said.
From July 1, taxpayers will not be able to file income tax returns if they fail to quote the Aadhaar number, or at least show proof of having applied for the same.
Others may have to acquire Aadhaar by year-end to be able to retain their existing PAN.
“The government has proposed quoting the Aadhaar number mandatory for filing (IT) returns to eliminate discrepancies from the system... many individuals have been holding multiple PANs and filing returns multiple times. Once quoting of Aadhaar becomes binding, this problem will not be there. The next thing on our agenda will be to decide on the timeframe that will be given to people to link their PAN with Aadhaar,” revenue secretary Hasmukh Adhia said, explaining the rationale behind making Aadhaar mandatory for PAN card holders.
At present, there are 25 crore PAN cards.
Quoting of PAN is mandatory for cash transactions in case when hotel or foreign travel bills exceed ₹50,000. It is also mandatory to quote the number for purchase of jewellery above ₹2 lakh either in cash or by plastic money and while making large deposits in banks.
The finance minister said making Aadhaar mandatory for filing IT returns will help in checking tax evasion.
“Why shouldn’t we make use of this technology if it helps us catch tax evaders?” Jaitley said in Parliament, replying to queries by opposition leaders.
“Aadhaar is a more foolproof identity of a citizen as it cannot be duplicated and this will help in addressing graft. Though the move will ensure transparency in filing of income tax returns, at the same time, this can also help in tracing money launderers,” said a senior government official.
The government is right to demand Aadhaar from beneficiaries of state-run schemes such as mid-day meal or subsidies, but no one should be denied entitlements because of lack of a unique identity number, Nandan Nilekani has told HT.
Nilekani — the brain behind the Unique Identification Authority of India (UIDAI) and its first chairman — appeared to defend Aadhaar in the face of a storm of criticism of India’s largest identification system, saying the scheme had incurred massive savings for the government.
“The government and departments are simply following the law passed by Parliament,” the 61-year-old told HT.
“Demonising Aadhaar is not going to solve any problem.”
Nilekani spoke to HT on Monday, two days before the government pushed a controversial legislation through Parliament that made Aadhaar mandatory for filing income tax returns and applying for PAN cards.
Finance minister Arun Jaitley told the Lok Sabha that Aadhaar might become the sole identity document in the future to weed out fraud. Earlier, the government had made Aadhaar necessary to access the mid-day meal scheme.
The government’s move has