The Budget 2019 had the Finance Minister Nirmala Sitharaman announcing that PAN Card and Aadhaar Card will be made interchangeable soon.
As per the new Income Tax rules, tax payers would now need either an Aadhaar Card or a PAN Card to file their Income Tax Returns (ITRs).
Before this announcement came in the Budget 2019, you ought to have both Aadhaar Card and a PAN Card to file ITR.
If you wish to know a few of the vital Budget 2019 announcements that would lead to new PAN and Aadhaar rules, then here is a post to go through!
New PAN and Aadhaar rules as per Union Budget 2019 announcements
1) Nirmala Sitharaman, the Finance Minister, proposed during her Budget 2019 speech to make PAN and Aadhaar interchangeable. It meant that it allowed people without having a PAN Card to file Income Tax Returns by only quoting their 2-digit Aadhaar number. Further, it also means that wherever you required quoting the PAN, you can now submit your Aadhaar details.
2) As per the proposed rules, the Income Tax Department of India shall allocate PAN to such person who uses Aadhaar details to file ITRs. It means that when you file your ITR using an Aadhaar Card, then the Income Tax Department will generate the PAN for you automatically. It will utilize your Aadhar data from UIDAI to provide you with an automatic PAN Card.
3) If you have already linked your Aadhaar with your PAN, then you have the choice to use Aadhaar instead of the PAN as per the new Income Tax Act to file ITRs.
4) The Finance Ministry of India has taken another step to track transactions of high-value by making it a must to quote PAN/Aadhaar for some transactions. The Budget 2019 had also introduced a provision that a person who receives relevant documents should ensure the correct quoting and PAN authentication. It is for prescribed transactions. For the compliance of such provisions, the Finance Ministry has also come up to amend penalty provisions.
5) As things stand today, the Income Tax Department is to make PAN invalid if it has not yet been linked with Aadhaar within the specified date. In the present scenario, the last date to link your PAN with Aadhaar is 31 st March 2020. The Finance Ministry has taken a step to safeguard all transactions made earlier. In the Budget of 2019, it has been proposed that if a person does not intimate the Aadhaar number, then the PAN allotted to the said person will be made inoperative.
PAN Vs Aadhaar at a glance
The basic purpose of a PAN Card is to help a taxpayer do his duty of paying taxes. It can also be used to track and identify every financial transaction made by an individual. PAN Card is issued by the Income Tax Department of India under the supervision of the Central Board of Direct Taxes (CBDT). Other than using a PAN Card to file ITRs, it can also be used as proof of identity and age. From opening a bank to Demat account, cash deposits worth Rs.50,000 and more and for other transactions, the quoting of your PAN details is mandatory.
Aadhaar is issued by the Unique Identification Authority of India (UIDAI), an agency of the Central Government. It is for the purpose of keeping a database of every registered citizen in India. With Aadhaar, it is easier to recognize an individual by cross checking the data with the data available in the system. It is also useful to transfer subsidies given by the Government for services such as LPG Connection/refill directly into the bank account of the Aadhaar Card holder.In the present context in India, having a PAN and Aadhaar is mandatory to enjoy many services of the land. With Aadhaar being made interchangeable with PAN, the significance of both these documents have increased to a new high. In case you don’t have a PAN Card then you can apply PAN Card online.