Why is PAN-Aadhaar Linkage Important?
There are several benefits to linking PAN (Permanent Account Number) and Aadhaar, as per reports. The uniqueness of PAN is achieved by conducting a de-duplication check on all already allotted PAN against the data furnished by new applicants. Under the current PAN system, only demographic data is captured. Linking PAN with Aadhaar eliminates the prospect of an individual possessing more than one PAN card, thus minimizing fraudulent activities. Moreover, the Income Tax Agency can detect any sort of tax evasion once PAN is connected with Aadhaar.
The Indian government has extended the deadline for linking PAN and Aadhaar by three months, to June 30, 2023. The earlier deadline was March 31, 2023. The move has been made to provide taxpayers with additional time to complete the process. Under the provisions of the Income-tax Act, 1961, every person who has been allotted a PAN and is eligible to obtain an Aadhaar number is required to link them. Failure to do so may result in repercussions under the Income Tax Act from April 1, 2023.
Advantages of Linking PAN and Aadhaar
Elimination of Multiple PAN Cards By linking PAN-Aadhaar, the prospect of an individual possessing multiple PAN cards is eliminated, which minimizes fraudulent activities. The linking process enables the government to detect and deactivate any duplicate PANs associated with a single individual.
Detection of Tax Evasion
Linking PAN-Aadhaar enables the Income Tax Agency to detect any instances of tax evasion. This is because Aadhaar has all of an individual’s information, including biometric verification. With the linkage, the Income Tax Agency can easily identify if a person has filed their tax returns or not.
Simpler Tax Filing Process
Linking Aadhaar to PAN makes the tax filing process simpler. Once the linkage is complete, individuals will no longer be required to provide documentation that they have filed their income tax returns, making the process faster and more streamlined.
Summarising Taxes for Future Reference
Linking your Aadhaar to your PAN will help in summarising the taxes related to the Aadhaar for future reference. This will aid in keeping the tax return process from getting cancelled and will also help in summarising the taxes related to the Aadhaar for future reference.