Linking Aadhaar-PAN Is Mandatory for Tax Filers: CBDT

The procedure of linking needs to be completed by 31 March this year.

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The CBDT has stressed that Aadhaar-PAN linking is “mandatory” for those filing an Income Tax Return (ITR) and this procedure has to be “completed” by 31 March this year.

“Constitutional validity of Aadhaar has been upheld by the Supreme Court of India in September 2018. Consequently, in terms of Section 139AA of Income Tax Act, 1961 and order dated 30 June 2018 of the Central Board of Direct Taxes, Aadhaar-PAN linking is mandatory now which has to be completed till 31 March 2019 by PAN holders requiring filing of ITR," the CBDT said in an advisory on Thursday, 14 February.

The Supreme Court on 6 February had confirmed that linkage of PAN with Aadhaar is mandatory for filing of ITRs.

This reiteration of the September order of the apex court came on an appeal filed by the Centre against a Delhi High Court order allowing two persons, to file their ITRs for 2018-19 without linking their Aadhaar and PAN numbers.

A bench comprising Justices A K Sikri and S Abdul Nazeer said the top court has already decided the matter and upheld the section 139AA of the Income Tax Act.

The apex court on 26 September last year had declared the Centre's flagship Aadhaar scheme as constitutionally valid but struck down some of its provisions including its linking with bank accounts, mobile phones and school admissions.

‘Easier to Find Assesse’s Spending Pattern’

Former CBDT Chairman Sushil Chandra, early this month at an event, had said that just 23 crore PAN card holders-- over half of the total PAN card holders -- have so far linked their cards with biometric ID Aadhaar.

He had said the I-T Department has so far issued 42 crore permanent account numbers (PAN), of which 23 crore have been linked with Aadhaar.

Chandra said that once Aadhaar is linked with PAN and PAN is linked with bank account, the I-T department can find out spending pattern and other details of the assessee.

Also since many agencies are linked with Aadhaar, it would be easier to gauge whether the benefits of welfare schemes are availed by eligible persons, he said.

Section 139 AA (2) of the Income Tax Act says that every person having PAN as on 1 July 2017, and eligible to obtain Aadhaar, must intimate his Aadhaar number to tax authorities.

While Aadhaar is issued by the Unique Identification Authority of India (UIDAI) to a resident of India, PAN is a 10-digit alphanumeric number allotted by the IT Department to a person, firm or entity.

The CBDT formulates policy for the tax department.