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Union Budget 2019-20: Taxes

Union Budget 2019-20: Aadhaar can be interchanged with PAN for filing tax returns

Proposal to give unique identity number expeditiously to visiting NRIs

July 05, 2019 08:09 pm | Updated 08:10 pm IST - NEW DELHI

NEW DELHI,  26/01/2018: Aadhaar.  Photo: V_V_KRISHNAN

NEW DELHI, 26/01/2018: Aadhaar. Photo: V_V_KRISHNAN

The Union Budget 2019-20 has proposed to make Aadhaar interchangeable with PAN, thereby allowing people without PAN to file income tax returns using only their Aadhaar, Finance Minister Nirmala Sitharaman said on Friday.

Further, the Finance Minister proposed allotting Aadhaar to non-resident Indians, arriving in India, on an expedited basis.

“More than 120 crore Indians now have Aadhaar,” Ms. Sitharaman said in her maiden Budget speech. “Therefore, for ease and convenience of tax payers, I propose to make PAN and Aadhaar interchangeable and allow those who do not have PAN to file income tax returns by simply quoting their Aadhaar number and also use it wherever they are required to quote PAN.”

42 cr. PAN cards issued

According to data with the Central Board of Direct Taxes (CBDT), 42 crore PAN cards have been issued, of which only 23 crore have been linked with Aadhaar. However, the annexure to the Minister’s speech makes it clear that the intent is not to replace PAN with Aadhaar as the primary identity proof when it comes to income tax.

While it is proposed to make Aadhaar interchangeable with PAN to enable those without PAN to file tax returns, “the Income Tax Department shall allot PAN to such persons on the basis of Aadhaar after obtaining demographic data from the Unique Identification Authority of India (UIDAI).”

In other words, if you do not have a PAN and want to file income tax returns, you can do so, but you will still be allotted a PAN. Those who have already linked their PAN with their Aadhaar can choose which ID they want to use while filing taxes.

“It is also proposed to provide that a person, who has already linked his Aadhaar with his PAN, may, at his option, use Aadhaar in the place of PAN under the [Income Tax] Act,” the Budget document said.

So far, non-resident Indians with an Indian passport had to wait for 180 days after their arrival in India before they can apply for Aadhaar. The Budget proposed to remove this waiting time.

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