How Important is Linking Aadhaar to PAN?
Linking your PAN card and Aadhaar card is required for every monetary transaction above Rs. 50,000. Similarly, your income tax return cannot be finalised without linking your Aadhaar number to your Permanent Account Number (PAN). The government has made the process of linking a PAN card with an Aadhaar card quick and easy. You can now register for this service till March 31, 2023. However, this process now costs Rs. 1,000.
The Income Tax Department issues the PAN card, a unique tax identification number. This PAN is necessary for several processes, including filing IT returns and carrying out tasks like creating bank accounts, buying property and jewellery, taking loans, opening Demat accounts, etc. Aadhar is a recently introduced identity card that the UIDAI has aimed to give every Indian citizen. It is biometric-enabled and hence, more secure.
Linking Your Aadhaar Number to Your PAN Card Online
To link your Aadhaar card to your PAN card, you will need to create a username and password. You will also need to register on the Income Tax website. To begin the process, log on to the income tax website (www.incometaxindia.org) by entering your username and password. Next, enter your PAN card number. Within the protected portion of your Income Tax site, you will find a field to enter your Aadhaar number and PAN number to link them together. There is no need for any paperwork as the verification process is done entirely digitally. To avoid delays, make sure that the name on your Aadhaar card is the same as the one on your PAN card. If that is not the case, you can run into issues while trying to link your Aadhaar card and PAN card in the cloud.
It is common for names to be mismatched, but now there is a new service to help fix this. A person’s name can sometimes appear differently on two papers. For example, some people only use their initials. The documents can still be linked using other identifying data such as the same birth date or mobile phone number. The Aadhaar Card and the PAN card are linked once the department sends a One Time Password (OTP) for verification. You may now establish a connection between the two records using the short message service (SMS).
Reasons to Link Your PAN Number and Aadhaar Number
- A fraud-preventing audit trail
By linking Aadhaar and PAN numbers, the government will have a paper trail to follow. The income tax department benefits from the link because the Aadhaar card is now needed for all digital transactions. As there is no paper trail to follow, many illegal funds enter the market. This helps the government catch people who have been evading taxes. Due to a greater adoption rate for Aadhaar cards than PAN cards, the government’s base has also increased. This is vital for sealing any potential holes in the budget. In this way, it is now easier to identify tax cheats using fake PAN cards.
- Identifying a multitude of PAN cards
By filing for several PAN cards, a firm can use separate cards for various financial operations and pay the taxes related to those activities. They also use some of the PAN cards to hide accounts or transactions from the income tax department. The government claims that one of the most common ways by which people avoid paying taxes is by dividing their income among several false PAN cards. However, this practice will become extremely difficult once the PAN card system is revamped. This practice solves another major tax gap for the government.
Thanks to the link between the PAN and Aadhaar cards, the government can verify a person’s identity using the Aadhaar card and keep track of all financial transactions made using that PAN card. As soon as various PAN cards are issued to the same person, the government can check and take quick action.
- Gain for the average taxpayer
Everyone will have to pay taxes when PAN and Aadhaar are connected. Once tax evasion is curbed, the government will be able to grow its income base. This will further allow the government to lower tax rates that benefit people. The PAN-Aadhar link can be quite useful as it would do away with the need for tiring steps like sending receipts to the IT department or using an e-signature. By using Aadhaar e-verification, the process would be carried out routinely.
- Facilitated tax return filing
Taxpayers have always needed their PAN cards to file taxes. Going forward, they must also have their Aadhaar number handy. Online tax returns will now be much easier for people. It is possible to use the OTP given to your Aadhaar-linked mobile phone number to verify the authenticity of your returns (ITR-V).
Conclusion
By the end of March 2023, the government plans to cancel all PAN cards that have not been linked to Aadhaar. Multiple PAN cards given to the same person can be avoided by linking PAN with the Aadhaar number. If your Permanent Account Number (PAN) is not linked with your Aadhaar number, your income tax return form will not be completed. The citizen will be given a detailed summary of his tax duties. If you need more assistance with understanding the process of linking your Aadhaar with your PAN, visit Piramal Finance. This online platform is what you need to learn everything about relevant developments and processes in the world of finance. For more information on financial matters or about personal loans, credit cards, and financial management, check out the blogs on their website!