The Income Tax (IT) Department on 30 June 2017 clarified that PAN-Aadhaar linking will become mandatory from 1 July 2017, however, it is not mandatory to link before 1 July.
If one is not able to link Aadhaar and PAN before 1 July, then the PAN will not become invalid automatically. Rather, after 1 July 2017, the linking will become mandatory and the Union Government will declare a date after which the PAN which is not linked to Aadhaar will become invalid.
Why was there a need of clarification by IT Department?
The clarification came after the IT Department witnessed a mad rush for linking Aadhaar number with Permanent Account Number (PAN) on the income tax website. People have even found the website crashing.
Many assumed that if they do not link their Aadhaar with their PAN before 1 July, their PAN will become invalid.
However, it is not the case. Taxpayers, who are not able to link their Aadhaar and PAN by 1 July, will have the option to mention the Unique Identification Authority of India (UIDAI)-provided Aadhaar number in the e-ITR and this will be considered as valid linking of the two unique numbers.
If Aadhaar credentials are not linked with PAN or mentioned in the ITR, then such a person will not be able to e-file the ITR. E-filing of ITR is mandatory for all individuals except whose income is less than Rs 5 lakh per annum and those who are above 80 years of age.
Two-step process of linking Aadhar with PAN
IT Department in May 2017 made it easier for taxpayers to link their PAN with Aadhaar by launching an e-facility:
• Linking Aadhar with PAN on the Income Tax website: Visit www.incometaxindiaefiling.gov.in and click on the link on 'Link Aadhaar'.
• Provide the Details: Provide PAN, Aadhaar number and enter name exactly as given in Aadhaar Card and submit.
The Union Government in March 2017 made Aadhaar card mandatory to file Income Tax Return (ITR) with effect from 1 July 2017. Aadhaar was also made mandatory for applying for PAN with effect from 1 July.
Till now, the IT department has linked over 2.16 crore Aadhaar numbers with its PAN database. There are over 25 crore PAN card holders in India, while Aadhaar has been alloted to about 115 crore people.
Aadhaar is issued by the UIDAI to a resident of India, while PAN is a ten-digit alphanumeric number allotted by the I-T department to a person, firm or entity.
When: 30 June 2017