With yet another magnificent moves by the Indian government to strengthen its grip on tax evaders, the government has introduced a new Section 139AA in the Income Tax Act, 1961 by way of amendment to Finance Bill, 2017 passed by Lok Sabha.

Each individual will have to requisite cite Aadhaar number in their PAN application form or income tax return form after July 1, 2017. All existing PAN card holders will be required to intimate their Aadhaar number to the IT department on or before July 1, 2017. After July 1, all PAN numbers which are not linked to Aadhaar numbers are treated as invalid.

Why was this needed?

Multiple PAN numbers has been a major concern for the Income Tax department. Since a lot of tax evaders have multiple PAN numbers which they utilise in concealing their real income. This concern was also highlighted in a CAG report of 2011, after which the government had considered issuing biometric PAN cards to taxpayers across the country to weed out the duplicate PAN numbers. However, the proposal could not be implemented due to parallel implementation of similar biometric based Aadhaar cards.

How is linking Aadhaar with PAN useful?

Aadhaar Being a biometric verified identification is very secure it makes is nearly impossible for any individual to have multiple. Aadhaar numbers and by linking Aadhaar to PAN numbers, the government is making sure that one person can hold one PAN only.

How to link my Aadhaar with PAN?

Income Tax department has launched a separate portal to link Aadhaar Card with PAN Card. It’s a hassle free procedure and you just have to follow few steps and will take only few minutes-

Step-1: Go to E-filling portal (incometaxindiaefiling.gov.in) and tap on ” Link Aadhaar ” option.

Step-2: Enter your correct PAN number.

Step-3: Enter your correct Aadhaar number.

Step-4: Enter your name as per Aadhaar Card.

Step-5: Choose the option- ‘If you have only year of birth on your Aadhaar card’. 

Step-6: Enter captcha code or you can request OTP (you will receive OTP on your registered mobile number)

Step-7: Enter OPT number and click on “Link Aadhar ” to link your Aadhaar number with your PAN number.

Now that you know how to link Aadhaar with PAN, click here to do it. You will reach incometaxindiaefiling.gov.in link aadhaar page and use steps given above.

Demerits of not linking Aadhaar With PAN Card?

  1. Your Income Tax Return (ITR) will not be processed as government has made it mandatory to link Aadhaar card with PAN card.
  2. Tax payers will not be able to claim losses like capital loss, business loss, etc.
  3. You will have to face legal consequences, along with penalty of Rs 5000 for not filling ITR on time.
  4. Tax payers will be unable to claim refund of extra tax paid.

What If You Don’t have an Aadhaar Card ?

You can apply for the Aadhaar card and provide the application number as a document proving that you’ve applied for one.

You can apply for Aadhaar card here.

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