On the 5th of July, during the Budget session, Nirmala Sitharaman, the Finance Minister of India, announced, aadhaar card and Permanent Account Number (PAN) card, from here on, can be used interchangeably for filing income tax (IT) returns.
Any citizen who does not have a PAN card can file the IT returns using their aadhaar card.
Ms. Sitharaman said, “Aadhaar card for NRIs with Indian passports will be issued after their arrival in India, without waiting for the mandatory 180 days.”
Ms. Sitharaman said, “More than 120 crore Indians now have Aadhaar card, therefore for ease of taxpayers I propose to make PAN and Aadhar interchangeable and allow those who don’t have PAN to file returns by simply quoting Aadhaar number and use it wherever they require to use PAN.”
After the proposal of making aadhaar card and PAN card interchangeable is approved in the Lok Sabha, the citizens of India will be able to use aadhaar cards instead of PAN cards. With the help of the aadhaar card, they can handle financial transactions such as mutual fund investments and buying gold as well.
As per the current rules, to pay tax and file IT returns, an individual should have their PAN. Without the PAN, the tax cannot be filed. It is also mandatory for the citizens to link their PAN and aadhaar number to file IT returns.
The motive behind making aadhaar card and PAN card interchangeable is to improve tax compliance and make the process of paying taxes easier for the public.
Stay tuned for further updates.