The Indian government has been pushing for the Aadhaar-PAN linking since 2017. In a move towards a digitized and unified tax system, the Finance Act 2017 amended the Income Tax Act, 1961, introducing Section 139AA. The section mandates linking of Aadhaar with PAN, making it mandatory for taxpayers to provide their Aadhaar details when filing their Income Tax Returns (ITRs).
What is Aadhaar?
Aadhaar is a 12-digit unique identification number issued by the Indian government to its citizens. It is the world’s largest biometric ID system, with over 1.28 billion enrollments as of March 2021. Aadhaar is linked to the individual’s demographic and biometric data, making it an essential tool for the government to identify and authenticate citizens. Aadhaar is used for various government schemes and services, such as subsidies, bank accounts, mobile numbers, and passport issuance.
What is PAN?
PAN (Permanent Account Number) is a 10-digit alphanumeric number issued by the Income Tax Department of India. It is a unique identification number assigned to taxpayers, including individuals, companies, and firms. PAN is mandatory for financial transactions such as filing income tax returns, opening a bank account, buying or selling immovable property, etc.
What is Section 139AA?
Section 139AA of the Income Tax Act, 1961, introduced by the Finance Act 2017, mandates linking of Aadhaar with PAN. The section came into effect from 1st July 2017, making it mandatory for all taxpayers to link their Aadhaar with PAN to file their ITRs.
The section also provides for consequences of non-linking of Aadhaar with PAN. If a taxpayer fails to link their Aadhaar with PAN, their PAN will be considered invalid. This means that the taxpayer will not be able to use their PAN for any financial transactions, including filing ITRs.
However, the section also provides for exemptions in certain cases. Individuals who are not eligible to obtain an Aadhaar number can provide their enrollment ID, which is issued at the time of Aadhaar application, to link with their PAN. Also, individuals who do not have an Aadhaar number or enrollment ID can file their ITR by providing their Aadhaar enrollment number or Aadhaar ID application number.
Why is Aadhaar-PAN Linking Important?
The Aadhaar-PAN linking is a step towards a digitized and unified tax system. The linking of Aadhaar and PAN helps the government to eliminate duplicate PANs and identify fraudulent practices. It also helps in identifying tax evaders and non-filers.
The Aadhaar-PAN linking also ensures that taxpayers can file their ITRs easily and seamlessly. The process of linking Aadhaar with PAN is simple and can be done online through the Income Tax Department’s e-filing portal.
Conclusion
Section 139AA of the Income Tax Act, 1961, mandates linking of Aadhaar with PAN, making it mandatory for taxpayers to provide their Aadhaar details when filing their ITRs.
Read more useful content:
- section 145 of income tax act
- section 10e of income tax act
- section 9 of the income tax act
- section 94b of income tax act
- section 206aa of income tax act
Frequently Asked Questions (FAQs)
Q: What is Section 139AA of the Income Tax Act?
A: Section 139AA of the Income Tax Act makes it mandatory for individuals to link their Aadhaar card number with their PAN card number.
Q: Who needs to comply with Section 139AA of the Income Tax Act?
A: All individuals who have a PAN card and an Aadhaar card need to comply with Section 139AA of the Income Tax Act.
Q: When did Section 139AA of the Income Tax Act come into effect?
A: Section 139AA of the Income Tax Act came into effect from 1st July 2017.
Q: What happens if I don’t link my Aadhaar card with my PAN card as per Section 139AA?
A: If you don’t link your Aadhaar card with your PAN card as per Section 139AA, your PAN card may become invalid and you may not be able to carry out financial transactions requiring a PAN card.
Q: Can I link my Aadhaar card with my PAN card online?
A: Yes, you can link your Aadhaar card with your PAN card online through the income tax department’s e-filing portal.
Q: What are the consequences of linking my Aadhaar card with my PAN card?
A: Linking your Aadhaar card with your PAN card can help streamline the process of filing income tax returns and reduce cases of tax evasion.
Q: Is it mandatory to link my Aadhaar card with my PAN card if I don’t have an Aadhaar card?
A: No, it is not mandatory to link your Aadhaar card with your PAN card if you don’t have an Aadhaar card. However, if you want to apply for an Aadhaar card, you will need to provide your PAN card number.
Q: Can I unlink my Aadhaar card from my PAN card once they are linked?
A: No, once your Aadhaar card is linked with your PAN card, it cannot be unlinked.
Q: Is there any penalty for not linking Aadhaar with PAN?
A: Yes, if you do not link your Aadhaar with PAN, a penalty of Rs.1,000 may be levied under Section 234H of the Income Tax Act.
