Why is Aadhaar and PAN link important? Know its benefits, rules, danger of PAN becoming inoperative, complete information related to ITR, tax refund and Aadhaar-PAN linking.
Aadhaar PAN Benefits: If you have ever filed Income Tax Return (ITR), made a big transaction in the bank or updated financial documents, then you must have heard “Link Aadhaar and PAN.” Now the question comes to mind that when Aadhaar and PAN are two different identity cards, then why is there a need to link them?
The answer is identity verification, transparency in the tax system and prevention of fraud. The government believes that linking Aadhaar and PAN confirms the true identity of a person and helps in curbing problems like tax evasion or misuse of more than one PAN card.
What is Aadhaar and PAN?
Aadhaar is a 12-digit unique identification number, issued by the Unique Identification Authority of India (UIDAI). Its purpose is to give a unique identity to every citizen.
PAN (Permanent Account Number) is a 10 digit alphanumeric number, which is issued by the Income Department. It is mainly used in tax, banking and large financial transactions.
Why are Aadhaar and PAN linked?
1. One person, one identity
Earlier in some cases, more than one PAN card was found in the name of the same person. Due to this, there was a possibility of irregularities in the tax system. Linking with Aadhaar helps in ensuring that a person is using only a valid PAN.
2. Help in preventing tax evasion
If a person tries to hide his income by using different PANs, Aadhaar linking makes it easier to detect such activities. This makes the tax system more transparent.
3. Easy to fill ITR
By linking Aadhaar and PAN, the process of Income Tax Return (ITR) becomes simpler. Identity verification takes less time and many online services are easily available.
4. Government records remain correct
When both the documents are linked, it becomes easy to match the name, date of birth and other details. This reduces the possibility of mistakes or duplicate information in the records.
5. Promotion of digital services
To strengthen digital governance in India, the government is adding various services online. Aadhaar-PAN linking is also considered a step in this direction.
What can happen if Aadhaar and PAN are not linked?
Under the Income Tax Law, for those for whom Aadhaar-PAN linking is mandatory, PAN may be considered inoperative if it is not linked after the time line. In such a condition, there may be problems in many tax and financial services, such as-
- Problem in filling ITR
- Delay in getting tax refund
- Problem in matters related to TDS/TCS
- Problem in some financial transactions
Example- Suppose Vaibhav works and files ITR every year. If his PAN is not linked to Aadhaar and he falls in the category of people for whom linking is mandatory, his PAN may become inoperative. Due to this he may face difficulty in filing ITR and getting tax refund. But if he links both the documents in time, his tax related process will continue without any interruption.
1. When was PAN card started?
The concept of PAN was introduced in 1972. Since 1995, the Income Tax Department started issuing 10-digit alphanumeric PAN. Like- ABCDE1234F
2. When was Aadhar Card started?
UIDAI Established: 28 January 2009
First Aadhaar number issued: 29 September 2010
First Aadhaar card: Issued to Ranjana Sonawane, resident of Nandurbar district of Maharashtra.
Issuing Agency: UIDAI (Unique Identification Authority of India)
When did linking of Aadhaar and PAN start?
In 2017, Section 139AA was added to the Income Tax Act through the Finance Act, 2017. After this, it was made mandatory to link Aadhaar with PAN for filing ITR and making a new PAN.
Most Asked Questions
Q-1 Where and who got the first Aadhar card in the country?
Ans- The first Aadhar card in the country was given to Ranjana Sonawane, a resident of Nandurbar district of Maharashtra.
Q-2 When was PAN card introduced?
Ans- Income Tax Department started issuing 10 digit PAN card from 1995.
Q-3 When did the rule of linking PAN with Aadhaar come into existence?
Ans- It started in 2017, when it was made mandatory to link both the important documents.