As part of the new Finance Bill passed by the Parliament, your PAN number may become invalid if not linked to your Aadhaar by 31st December this year. A new amendment to the the Finance Bill also makes it compulsory for salaried individuals to quote their Aadhar number while filing their tax returns beginning July 1st.
Preventing tax fraud
Speaking in the Parliament, Finance Minister Arun Jaitley said that this provision was being introduced to curb the instances of tax fraud in the country. He said that it was found that several people in the country have multiple PAN cards that were obtained fraudulently which they use to avoid paying taxes.
The government believes that making Aadhar compulsory will help avoid such cases as the UID (Unique Identification) number is linked to a person’s biometric details such as fingerprints and retina scans.
A report in the Hindustan Times quoted an official as saying that 31st December has been set internally as the cut-off date for people to link their Aadhar number with their PAN by the government.
Privacy concerns
However, not everyone believes that this is an appropriate move and several political parties walked out of the Parliament in protest.
There have been several concerns raised about the current level of privacy and data protection under the Aadhar framework. Critics say that this move should be delayed until better safeguards and technology are put in place.
Moreover, in an interim order, the Supreme Court of India has said that Aadhaar cannot be made mandatory until it passes a final order on the issue of privacy protection.
Currently, over 108 crore people in India have an Aadhar number which represents over 98% of the population. The Aadhar scheme has also garnered worldwide praise from the World Bank and other countries who have appreciated the scope of the entire project.
In contrast, there are just 25 crore registered PAN numbers which are mandatory to be produced for filing of taxes and for making large cash payments.
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