You are a citizen of India and proud to display your identity. You are identified as a citizen, through your Voter ID, Passport, PAN Card or driver’s license. You also have Aadhaar, a 12-digit unique identification number, which has been issued by the Government of India, as an identity for every citizen of the country.
But, is Aadhaar just another identity proof or is it something more? Using Aadhaar you can open a bank account, get your passport or even avail a digital locker facility. (Digital locker is a facility where you can store personal documents on the Government Server). There’s more…. You can even get your pension or employee provident fund money, sent directly to your bank account. All you need to do is link Aadhaar to your savings bank account.
Then you have the DBT (Direct Benefit Transfer), where your 17 digit LPG consumer number is linked to your bank account and Aadhaar. The LPG subsidy is sent directly to your bank account. You can also make payments for items you purchase at retail stores, using the aadhaar enabled payment system (AEPS). Today, the discussion on Aadhaar has reached a whole new level. Aadhaar was made compulsory for the mid-day meal scheme. (A Government scheme designed to provide nutritional meals to school children). After a lot of controversy, this plan has now been scrapped.
Now, the Government has proposed to make Aadhaar card compulsory for filing income tax returns and also applying for a PAN card. This move is expected to stop tax fraud in India. Is this a good idea? Let’s find out. Want to know more on tax planning? Just leave a missed call on IndianMoney.com financial education helpline 02261816111 or just post a request on IndianMoney.com website. IndianMoney.com offers Free, Unbiased and on-call financial advice on Insurance, Mutual Funds, Real Estate, Loans, Bank Accounts and capital markets.
SEE ALSO: Aadhaar Card Check Online
Why is Aadhaar being made compulsory while filing income tax returns?
The Finance Minister Arun Jaitley, has said that some citizens have multiple PAN cards, which makes it easy to evade taxes. The Government wants you to include Aadhaar number while filing your income tax returns. Aadhaar identifies you through biometrics (finger prints and iris scans). This makes committing tax fraud nearly impossible.
There’s more….From July 1st 2017, any PAN card which is not linked to an Aadhaar is considered invalid. This will prevent you from having multiple PAN cards and committing tax fraud.
Aadhaar Compulsory For Filing I-T Returns: A Good Idea?
1. Tax evaders will find escaping taxes difficult
Have multiple PAN cards and use them to evade paying tax? Life is going to get really difficult. The Government will soon force you to link Aadhaar to your PAN card. You will be able to link only a single PAN to your Aadhaar. (This has to be the original). So how can you evade taxes?
The Government has been trying to get citizens to link Aadhaar to the PAN, for the past few years. Unfortunately, not much progress has been achieved. Now, from July 1st 2017, you would have to compulsorily link Aadhaar to your PAN, otherwise your PAN card is invalid. All escape routes to evade tax are sealed….Right?
2. High Value transactions will have a paper trail
The Government has made a proposal to cap cash transactions at INR 2 Lakhs, instead of INR 3 Lakhs. With cash transactions being capped at just INR 2 Lakhs, hiding illegal cash is getting really difficult. You would have to buy things/items using your credit/debit cards, cheque or some other digital methods of payment, instead of cash.
When you pay for gold jewelry or any costly item using digital methods of payment, it leaves a trail. You have to furnish PAN card details to the jeweler, if you buy gold/gold jewelry worth INR 2 Lakhs or more. If your PAN is linked to your Aadhaar, it is very easy for the tax department to track your real estate purchases, gold jewelry, luxury goods or other costly purchases. How will you escape the tax net?
Aadhaar could be a game changer for the Government, tax department and the economy. Aadhaar is far greater than the sum of its parts. The Government had promised to destroy black money and catch tax evaders. It is living up to this promise. The biggest weapon in this fight…The humble Aadhaar.
Be Wise, Get Rich.
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