As the Indian government continues to develop its digital infrastructure, it has now become compulsory to link PAN and Aadhaar card. This is to ensure that all citizens can enjoy the benefits of the government’s digital services. The Indian government has been pushing for the linking of PAN and Aadhaar since 2019. However, it is only now that the deadline for the linking has been set. According to the new rule, all PAN cards must be linked with Aadhaar by March 31, 2023.
Although this requirement may only seem to be only a legal requirement, the benefits can be reaped both by the government and the taxpayers. The linking of PAN and Aadhaar will enable the government to better track the financial transactions of citizens. This will help reduce tax evasion and ensure that all citizens pay their taxes on time. It will also help the government detect and prevent any fraudulent activities. The linking of PAN and Aadhaar will also enable the government to provide better services to citizens. For example, it can help in quicker processing of tax refunds and faster identification for other financial services like loans, insurance etc.
Moreover, linking PAN with Aadhaar will make filing taxes easier as all necessary information would already be stored in aadhaar database. This means that taxpayers need not worry about remembering their long PAN numbers every time they file taxes or apply for any other financial services for business. The PAN Aadhar linking will be a fantastic facilitator because it would eliminate the need for more complicated tasks like submitting the receipt to the IT department or e-signatures. Automatic Aadhar e-verification will complete the task. Also, this would reduce the possibility of an individual holding more than one PAN card, which is beneficial to both the government and the taxpayer.
Security Provisions and Privacy Concerns
However, there are some concerns over privacy when it comes to the linking of these two documents as both contain sensitive personal data such as date-of-birth, address etc. To ensure that citizens’ data is secure from hackers or malicious actors who may want to misuse this information, various security measures have been put into place by UIDAI (Unique Identification Authority of India). These include encryption technology and a two factor authentication process which requires users to enter a random OTP (one time password) sent on their registered mobile number before being able to access the data in question. Such measures ensure that even if someone does manage to get hold of one’s Aadhaar details, then they won’t be able access them without knowing the user’s OTP code, thus protecting his/her personal information from getting misused by fraudsters or cyber criminals.
Also another concern that arises while linking your aadhaar to your pan card is that one must have their names matching on both of the above cards, otherwise the procedure would be hindered when you link PAN and Aadhaar online. As the mistake of a name mismatch is common for the aadhaar and pan card holders, a new facility has been made where one can link their cards through the same date of birth and a common mobile number.
If there are any incorrect details in the Aadhar card, while linking the Aadhar card and PAN card, one can rectify and make corrections by either visiting the online website and updating the Aadhar details or by approaching the local E-Aadhar centre.
If the taxpayers fail to link their PAN and Aadhar cards by March 31st, their PAN cards would be deactivated and would be liable to pay a penalty upto Rs. 1000 for delaying past the deadline. Once your PAN card would be inoperative, you would not be able to do procedures where it would be mandatory like opening a bank account, purchasing/selling properties, etc.
Although, this process might be an extra legal obligation, we must mandatorily follow the Aadhar – PAN linkage as it is certainly the right decision towards a positive development by the Indian Government. By making it compulsory for everyone to link their PAN with Aadhar card, the government has taken an important step towards ensuring safe transactions while providing better digital services, where the benefits provided can be reaped by the society as a whole.