The Income Tax Department has been urging all taxpayers to link their Aadhaar with PAN for a long time now.
The official stipulated deadline for the linkage is March 31, 2019.
Earlier, the Supreme court had clarified that it is mandatory to link the two IDs in order to file I-T returns.
Here's why and how you must link your Aadhaar with PAN.
Why is it important to link Aadhaar with PAN?
All Indian residents are eligible to apply for an Aadhaar card.
And, all Aadhaar-holders must lawfully link it with PAN.
Section 139AA of the Income Tax Act states that every individual eligible to get Aadhaar, shall, on or after the 1st day of July, 2017, quote Aadhaar number in 1) the application form for allotment of PAN, and 2) in the return of income.
What happens if you fail to link PAN, Aadhaar
All persons who have been allotted a Permanent Account Number (PAN), and are eligible to get an Aadhaar, must link the two, on or before the the notified date (31st March, 2019), otherwise their PAN will be deemed invalid.
Next, under the 'Quick Links' section, click on 'Link Aadhaar.'
Post that, enter details such as Aadhaar number, PAN, Name, and the screen-displayed Captcha code.
Submit the details, click on 'Link Aadhaar', and you are done.
After successful verification from UIDAI, the linkage will be confirmed.
You can also link Aadhaar with PAN via SMS
Apart from the online method, users can also link their Aadhaar with PAN, using SMS service. To do so, type a text message in this format: UIDPAN (space) 12-digit Aadhaar number (space) 10-digit PAN, and send to 567678 or 56161 from your Aadhaar-registered mobile number.
And, what about NRIs
Although NRIs (only those who earn taxable income in India) must apply for PAN, they do not need to hold an Aadhaar card, since Aadhaar is applicable only to the normal residents of India.
That's why the provisions of Section 139AA of the I-T Act do not apply to NRIs.
This implies that such individuals are not required to link their Aadhaar with PAN.
Clearing the air around Aadhaar status
Post the September 26, 2018 SC verdict relating to authentication of Aadhaar, there has been some confusion with respect to the services where Aadhaar is necessary and where not.
Aadhaar is no longer mandatory for services such as bank accounts, telecom services, and school admissions/entrance tests.
However, it is still necessary for getting a PAN, filing I-T returns, and availing government welfare schemes.