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PAN cards not linked to Aadhaar will be disabled after August 31

Recently, when the Union Budget was released, the government said from this year, people can use Aadhaar to file their tax returns in India. While the government said it was making the permanent account numbers (Aadhaar and PAN) interchangeable, in practice, it killed PAN. Now, there is a report indicating that all PAN cards that are not linked to Aadhaar will be deactivated after August 31.

It is stated in the Business Standard report, “to validate and continue using existing PAN cards, citizens will have to link them to Aadhaar”. Else, these PAN cards will be deactivated, and people will have to quote the Aadhaar number while filing their taxes. Government sources told that once someone, who does not have Aadhaar linked to their PAN card or who do not have a PAN card, quotes Aadhaar while filing the tax return, a new virtual PAN number will be generated. This number will be linked to the quoted Aadhaar number.

There are currently around 400 million PAN cards in India, out of which only about 220 million of these are linked to Aadhaar. This process of linking the Aadhaar cards with the PAN cards started a few years ago, but the government was criticised for the movement, as people express concerns about privacy related to the linking of two numbers. It also faced a challenge in court. However, the Supreme Court in the verdict of Aadhaar earlier this year allowed the linkage of PAN Card and Aadhaar but also said that Aadhaar could not be made compulsory to avail essential services.

The government approved the Aadhaar Amendment Bill 2019 recently in Lok Sabha and Rajya Sabha, suggesting that in spite of the Supreme Court order use of Aadhaar by private companies like banks and telecoms will be allowed.

Here is how the linking of PAN and Aadhaar works:

 Everyone must link their PAN number with Aadhaar number.

 If you don’t have an Aadhaar number, you have to apply and get one.

 PAN cards not linked with Aadhaar will be disabled after August 31.

A government source told: “We are going to provide the flexibility to use either. But, PAN cards that are not so far linked to the Aadhaar will be first put in suspension. Citizens can activate them by linking them to Aadhaar.”

 People who don’t have a PAN card, don’t need to go for one more. While filing taxes, they can use the Aadhaar number.

 When you use the Aadhaar number to file tax, the Income Tax Department will generate a virtual PAN number linked to your Aadhaar number. In future, this his will be your PAN.

Why is the government doing this? Revenue Secretary A B Pandey recently told Business Standard: “If you have not linked PAN card with Aadhaar even after repeated extensions, the question is whether those PAN cards are even genuine in the first place. Therefore, we will block or invalidate those till the time they are linked with Aadhaar.”

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