Centre plans to link PAN and Aadhaar

New Delhi: In a significant decision, which could have a major impact across the socio-economic spectrum, the government on Tuesday proposed to make Aadhar card mandatory for filing income-tax returns as well as for applying for permanent account number (PAN), which will come into effect from July 1.

The proposal was moved through an amendment to the Finance Bill 2017, which was a part of the total 40 amendments which have been proposed in the legislation. The Parliament is likely to grant its nod to the bill on Wednesday.
Discussion is on over the legislation in Lok Sabha and finance minister Arun Jaitley is supposed to reply on the bill on March 22.

Any application for a PAN will also have to state Aadhaar or 12-digit unique ID, which is backed by biometrics like finger prints and iris scans stored in a central repository.

The new rules will become applicable from July 1 onward, Mr Jaitley said. Because they are amendments to the Finance Bill, the government should have no trouble having them cleared in parliament.

The Finance Bill is a Money Bill, for which the Lok Sabha’s clearance is necessary — and the government has a huge majority here.

The Rajya Sabha, where the government is in a minority, cannot reject a Money Bill and any recommendations it offers are not binding. From July 1 onwards, any PAN card not linked to an Aadhaar identity will be considered invalid. PAN is essential for basic financial transactions like receiving a salary. Aadhaar enrolment was the brainchild of the previous UPA regime and was introduced in 2009.