Friday, January 3, 2020

6 cases where you can use Aadhaar number instead of PAN.

Use Aadhaar Number Instead Of PAN: 6 Cases
Even though the Supreme Court of India has not yet made it mandatory, the Aadhaar and the PAN are two important documents that the government of India considers mandatory for certain purposes. Let’s take a look at what these two documents are.

Aadhaar Card
Issued by the UIDAI or the Unique Identification Authority of India, the Aadhaar eKYC contains a 12 digit unique identification number. Aadhaar also contains the biometric information and the demographic details of the individual. The Aadhaar card is now mandatory to avail subsidies issued by the government as well as for several welfare schemes. The eKYC is now considered the most important document to prove the identity of a person living in India and this can be done through the process of Aadhaar authentication.

PAN Card
Permanent Account Number or the PAN card is used for a more specific purpose. The PAN card contains a unique 10 digit number and this is issued by the Income Tax Department of India. The PAN number is essential for financial transactions and taxation.

PAN And Aadhaar Interchangeable: The New Ruling
The new ruling regarding Aadhaar and PAN allows the following.

  • You can quote your Aadhaar number instead of PAN while filing for IT returns and for other financial transactions.
  • You cannot use your PAN card instead of Aadhaar to avail of government subsidies and welfare schemes. Aadhaar is mandatory.
  • If you do not have a PAN card but do have Aadhaar you can use your Aadhaar number for financial dealings and taxation. The IT department may generate a new PAN automatically and link it to your Aadhaar in such cases.
  • You can use your Aadhaar number even if you have a PAN card. However, your Aadhaar and PAN cards must be linked.

6 Situations Where You Can Use Your Aadhaar Instead Of Your PAN 
Given below are 6 situations where you can quote your Aadhaar number instead of your PAN. The CBDT or the Central Board of Direct Taxes has made amendments to at least 100 forms in this regard.

  1. To open a bank account an individual can use his/her Aadhaar number instead of PAN. Rule 114B of the IT law has been amended in this regard permitting the individual to do so. 
  2. Form 15H for senior citizens and Form 15G for individuals have been amended following the notification on the 6th of November 2019. To prevent higher Tax Deducted at Source (TDS) in Form 15G and Form 15H the individuals/senior citizens can give their Aadhaar number instead of PAN.
  3. Quote landlord's Aadhaar number instead of PAN to your employer to claim an exemption on HRA or House Rent Allowance. However, the landlord's PAN and Aadhaar need to be linked.
  4. To deduct TDS on a property purchased at an amount above 50 lakhs the buyer can use either his Aadhaar number or PAN. Form 26QB for TDS returns has been amended in this regard.
  5. Aadhaar number of the landlord can be used instead of PAN to deduct TDS on rent above Rs. 50,000.
  6. Aadhaar number can be quoted instead of PAN to a new employer if you’ve started another job and you have to furnish the income details from your previous employment.

Ms. Nirmala Sitharaman, the Union Minister for Finance in India has proposed this new ruling where the Aadhaar card can be used instead of a PAN card. However, always remember that you cannot use your PAN as a substitute for your Aadhaar.

For more information contact us.
We, Finahub, are experts in Aadhaar related products and services like eSign, eKYC, 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]