Monday, June 19, 2017

Benefits of linking Aadhaar with PAN

Recently, the Indian Government introduced Section 139AA in the Income Tax (IT) Act by the course of the latest yearly budget and the Finance Act 2017. Under this act, quoting the Aadhaar number in the PAN application form or income tax return (ITR) form after July 1, 2017, has been made mandatory for everyone.
All existing PAN holders are expected to notify the IT department their Aadhaar number before the stipulated date.
All PANs that are not linked with Aadhaar number will be rendered invalid after July 1, 2017.
While there have been petitions against this move in the Apex Court calling it ‘totalitarian’ and an ‘electronic leash’ on the Indian citizens, the merits of linking Aadhaar number with the PAN cannot be ignored altogether.

Here are the top 3 benefits of linking Aadhaar with PAN.

Stop Tax Evaders
There are 250 million PAN cards at present, and unfortunately, many of them are either duplicate or obtained through fraudulent tactics to avoid taxes to the government.
However, an Aadhaar card cannot be obtained through fraud since it is verified by biometric means. Linking Aadhaar to PAN mandatorily means the fake PANs will be rendered useless and better control over taxpayers’ money will be yielded.
In fact, forcing taxpayers to pay up their due to the government is a necessary step to prevent money laundering. It is widespread nowadays and hence, eradicating it would bring equality in the society.

Check Loan Defaulters
A huge portion of the duplicate or fraudulent PANs can be used to procure a loan from banks above the credit limit fixed for an individual or a business entity. It would be wrong to give the life’s earnings of an average individual to a dishonest person with ulterior motives.
If the linking of Aadhaar number to PAN is made mandatory, such malpractices can be eradicated at their roots and thus provide a better transparency in the banking system and the society. Only the right person with proper credit score and sufficient financial health gets loans from banks, thereby reducing the number of defaulters.

Social Welfare Benefits to the Intended Destinations
Indian Government does run a few social welfare schemes for the benefit of its citizens, but the ultimate question is whether they ever reach their intended destinations. To the poor, the socially backwards or the helpless?
Well, with the proliferation of the duplicate identities and fake PANs, it is always a big problem. And linking Aadhaar number to PAN seems to be an efficient solution to that.
In a petition against it represented by senior counsel Shyam Divan, it has been challenged by saying, “We (citizens) are not servants of the state. We are independent citizens. They cannot invade my body and if they will invade it, then it would be a totalitarian state”.

However, considering the fact that there are almost 10 lakh fake permanent account numbers being fraudulently used in the country, we have sufficient reason to believe that linking Aadhaar to PAN is a commendable move. 

We, Finahub, are experts in Aadhaar related products and services like eSigneKYC, Authentication etc. If you want to know how your enterprise can start using it, please give us a call  @ 0484 2388285 or email us at [email protected]