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PAN-Aadhaar linkage mandatory for filing I-T returns Research Team | Posted On Thursday, February 07,2019, 01:23 PM

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PAN-Aadhaar linkage mandatory for filing I-T returns



The Supreme Court of India has put all doubts to rest. Linking PAN with Aadhaar is mandatory for filing IT returns. The Supreme Court has upheld Section 139AA of the Income Tax Act.

The Supreme Court of India has said it’s very essential to link PAN with Aadhaar to file ITR. This was after an appeal filed by the Centre against the Delhi High Court ruling allowing Shreya Sen and Jayshree Satpute to file ITR for AY 2018-19 (FY 2017-18) without linking Aadhaar to PAN. Some other individuals too had enjoyed relief last year.

SC has upheld Section 139AA of the Income Tax Act. Linking Aadhaar with PAN is compulsory.

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SEE ALSO: How To Link Mutual Funds With Aadhaar Card?

PAN-Aadhaar Linkage Mandatory For Filing I-T Returns

The Supreme Court had upheld the constitutional validity of Aadhaar Scheme. In a 4-1 judgement, the constitutional bench of the Supreme Court said that the Aadhaar Act did not violate the right to privacy. The Supreme Court upheld the passage of Aadhaar Bill as a money bill in the Lok Sabha.

What is a money bill?

As per Article 109(1), the money bill cannot be introduced in Rajya Sabha. The procedure to pass Money Bill in Lok Sabha without going through the Rajya Sabha, limits the powers of the Rajya Sabha. Apart from money bill, all other bills must pass through both the Lok Sabha and the Rajya Sabha.

The Supreme Court said the respondent had filed ITR for FY 2018-19 based on High Court orders. The respondents would have to link Aadhaar and PAN Card to file ITR for Financial Year 2019-20.

Supreme Court Decision on PAN-Aadhaar Linkage:

The petitioners had told the High Court that despite several attempts, they could not file ITR as there was no option to opt-out of Aadhaar or Aadhaar Enrollment Number during e-filing.

On September 26th 2018, the Supreme Court had declared the Governments Aadhaar Scheme to be constitutionally valid. However, linking Aadhaar to mobile, school admissions and bank accounts is not compulsory.

Aadhaar is mandatory for filing ITR and allotment of PAN. Linking Aadhaar with Bank Accounts is not compulsory and Telecom Service providers cannot force you to link Aadhaar to Mobile.

SEE ALSO: EPFO Aadhaar Link

About PAN Card:

Why PAN Card? The Income Tax Department introduced PAN to facilitate easy retrieval of information. This is vis-à-vis raising of loans, payment of taxes, tax demand, tax arrears and so on.

PAN is unique and permanent. It is not affected by change in address across States in India. It serves as identification and monitors key financial transactions of HNIs (High Net Worth) individuals in India to prevent tax evasion.

The Income Tax Department issues PAN under the supervision of CBT (Central Board of Taxes). It is like a National Identification Number and serves as an important Identity proof.

It’s compulsory to quote PAN for any payments (This is on challans) due to Income Tax Department.  You must quote PAN on all documents pertaining to financial transactions. It generally takes 30-40 days to get PAN.

See Also: How To Apply For PAN Card Duplicate?

Meaning of PAN:

Let’s have a look at a typical PAN. It looks like AFZPK7190K. The first 3 letters are AFZ. This is part of an alphabetic series moving from AAA to ZZZ.

The fourth character is P. This represents the status of the PAN holder.

“P”- Individual

“F” - Firm

“C” - Company

“H” - HUF

“A” - Association of Persons

“T” - Trust

The fifth character (in this case K) represents the first character of the PAN holder’s surname. The next 4 characters which is “7190” are sequential numbers running from 0001 to 9999. The last character which is “K” is an alphabetic check digit.

SEE ALSO: How To Pay Using Aadhaar Card?

About Aadhaar Card:

Aadhaar is a 12-digit unique number issued by the UIDAI (Unique Identification Authority of India). This is done by taking biometric details like IRIS scan and fingerprints and demographic information like date of birth and address.

You must link Aadhaar to PAN for filing ITR. You need Aadhaar to avail Government welfare schemes and subsidies. (This includes LPG/Kerosene and Scholarships.

The Aadhaar Virtual ID (VID) allows you to authenticate transactions without giving Aadhaar Number to Government and Private Agencies. You can use this for online address update of Aadhaar. It’s not compulsory to link Aadhaar to bank account, mobile SIMs, or for getting a Pension.

A penalty for late tax filing:

Effective Financial Year 2017-18, there’s a late tax filing penalty if you file ITR after due date (This was August 31st 2018). If you file ITR after August 31st 2018 but before 31st December 2018, a penalty of Rs 5,000 is charged. If ITR is filed after December 31st 2018, the penalty would be Rs 10,000. Small tax players have relief. The maximum penalty if total income does not exceed Rs 5 Lakhs is Rs 1,000. 

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