Misquoting Aadhaar to result in Rs. 10,000 fine

India

14 Jul 2019

You may be fined Rs. 10,000 for entering wrong Aadhaar

Banks and other institutions will soon make upgrades to allow people to quote India's national biometric ID (Aadhaar) for high-value transactions in place of the permanent account number (PAN).

However, there is a downside to that as, apparently, each time you happen to misquote your Aadhaar number, you may have to pay Rs. 10,000 as fine.

Here are more details.

Details

Penal provision to come into effect from September 1

Penal provision to come into effect from September 1

According to Hindustan Times, from September 1, 2019, failing to quote your unique identification number accurately while using Aadhaar to make high-value transactions (more than Rs. 50,000) will attract a Rs. 10,000 fine for each violation, government officials said.

The proposed penalty will come into effect once relevant laws are amended and a notification of the same is issued, the HT report added.

Before passing penalty, person shall be heard: Official

Requesting anonymity, a government official said, "It is also proposed that before passing a penalty order, a person shall be heard." The official added that a similar fine will be imposed on the person supposed to authenticate the identification number.

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Existing regulations

Existing penalty for PAN 'vague' and 'discretionary'

To note, under Section 272B of the Income Tax Act, an individual can be fined Rs. 10,000 for having more than one PAN, prohibited under Section 139A of Income Tax Act, 1961.

"No person who has already been allotted a PAN under the new series shall apply, obtain or possess another permanent account number."

However, experts say that the law is vague and discretionary.

Proposed amendment to make laws stricter; extend to Aadhaar

Further, officials said that the government has proposed to make the clause unambiguous and stringent, to ensure that every such violation is penalized with a Rs. 10,000 fine. The amendment will also extend the penal provisions to Aadhaar.

Budget

Finance Minister allowed for PAN-Aadhaar interchangeability in Budget speech

Finance Minister allowed for PAN-Aadhaar interchangeability in Budget speech

Meanwhile, another official, also choosing to remain anonymous, told HT that the amendment will be in line with the 2019 Budget announcement which allowed interchangeability of PAN and Aadhaar.

In her 2019-20 budget speech, Finance Minister Nirmala Sitharaman had said that 1.2 billion Indians possess Aadhaar while only 220 million have PAN, and announced that Income Tax returns could be filed by quoting Aadhaar.

'Those without PAN to file I-T returns by quoting Aadhaar'

Sitharaman had said, "For ease and convenience of taxpayers, I propose to make PAN and Aadhaar interchangeable and allow those who don't have PAN to file Income Tax returns by simply quoting their Aadhaar number and also use it wherever they're required to quote PAN."

Recent development

Suo motu PAN allotment for those filing ITRs with Aadhaar

Notably, last week, Central Board of Direct Taxes (CBDT) chairman Pramod Chandra Mody had said that the tax department will suo motu allot a fresh PAN to individuals who file I-T returns with only Aadhaar as part of a new arrangement to link the two databases.

"If Aadhaar is being quoted without PAN, I give him the PAN. It becomes linked," Mody had said.

Places where you can quote the Aadhaar instead of PAN

The Aadhaar can also be used for opening bank accounts, applying for credit/debit cards, opening a demat account, paying restaurant/hotel bills exceeding Rs. 50,000, and selling or purchasing goods or services exceeding Rs. 2 lakh per transaction.

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Most asked questions

When will this penalty come into effect?

What is you accidentally misquote your Aadhaar number?

Why is this penalty being imposed?

Where all can I use Aadhaar instead of PAN?

More questions

When will this penalty come into effect?

Asked 2019-07-14 16:11:59 by Anonymous

Answered by NewsBytes

The proposed penal provision will reportedly come into effect from September 1, 2019.

What is you accidentally misquote your Aadhaar number?

Asked 2019-07-14 16:11:59 by Anonymous

Answered by NewsBytes

A government official told Hindustan Times that an individual will be heard before the penalty order is passed. So, accidentally quoting the wrong Aadhaar number for transactions could be forgiven if the innocent mistake can be proven.

Why is this penalty being imposed?

Asked 2019-07-14 16:11:59 by Anonymous

Answered by NewsBytes

As Aadhaar and PAN are becoming more and more linked, such as, the former can be used in place of PAN for filing Income Tax returns, opening bank accounts, etc., it's important to impose the same penal regulations on the Aadhaar as there are for PAN. The government is also trying to amend Section 272B of the Income Tax Act to make it stricter.

Where all can I use Aadhaar instead of PAN?

Asked 2019-07-14 16:11:59 by Anonymous

Answered by NewsBytes

Apart from filing ITRs, as announced by Finance Minister Nirmala Sitharaman in her budget speech, Aadhaar can also be used for opening bank accounts, applying for credit/debit cards, opening a demat account, paying restaurant/hotel bills exceeding Rs. 50,000, and selling or purchasing goods or services exceeding Rs. 2 lakh per transaction.

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