A PAN (Permanent Account Number) is a unique 10 character code that is assigned to all tax paying entities in India. Issued by the Income Tax Department, the number links all transactions that attract tax under a single source, making it convenient for the government to keep track of these.
The Aadhaar card is a unique identification card that is assigned to every Indian citizen. Issued by the Unique Identification Authority of India, the card has a 12 digit number that serves as proof of identity as well as proof of address.
Linking of Aadhaar with PAN card has been made mandatory for filing taxes starting July 1, 2017.
The Central Board of Direct Taxes (CBDT) recently released a statement stating, “Everyone who has been allotted permanent account number as on the 1st day of July, 2017, and who has Aadhaar number or is eligible to obtain Aadhaar number, shall intimate his Aadhaar number to income tax authorities for the purpose of linking PAN with Aadhaar.”
Even though this is a simple and straight process for residents, there are many questions that NRIs face in this regard.
Is an NRI eligible to get Aadhaar Card?
As per the Aadhaar Act, 2016, only a resident who has resided in India for a period or periods amounting in all to 182 or more in the 12 months immediately preceding the date of application for enrolment is eligible for Aadhaar.
In effect NRIs are not eligible to receive Aadhaar Card as they would not have stayed in the country for more than 182 days. You can read more about it here.
I’m an NRI and don’t have an Aadhaar. Is it true that my PAN will be blocked if I’m not able to provide Aadhaar now?
Section 139AA of the Income-tax Act, 1961, as introduced by the Finance Act, 2017, provides for mandatory quoting of Aadhaar / Enrolment ID of Aadhaar application form, for filing of return of income and for making an application for allotment of Permanent Account Number with effect from 1st July, 2017.
However, such mandatory quoting of Aadhaar or Enrolment ID shall apply only to a person who is eligible to obtain Aadhaar number. An NRI who has not availed Aadhaar, need not link Aadhaar number for PAN.
On 5 April 2017, the Income Tax Department has clarified that quoting of Aadhaar in filing of returns for assessment year 2017-18 has been made mandatory for only those who are eligible to obtain the unique ID number.
I’m an NRI now and have already taken an Aadhaar. Should I link it to my PAN?
In case you did not know about the 182-days clause and have already received an Aadhaar Card, no need to panic. You can continue to keep the Aadhaar Card for the time being. In order to comply with latest legal regulations, you need to link your Aadhaar Card with your PAN Card.
In order to link Aadhaar with PAN, you can use the e-facility launched by the Income Tax department, which is the easiest way to link the two. Here is the two-step process to do it.
Go to www.incometaxindiaefiling.gov.in and click on the link on the left pane – Link Aadhaar
Provide your PAN, Aadhaar Number and enter the name exactly as given in Aadhaar Card (avoid spelling mistakes).
Enter the CAPTCHA code as shown on your screen. Press Link Aadhaar button.
After verification from UIDAI, which is the government website for Aadhaar, the linking will be confirmed. You will get a confirmation message as below:
Please ensure that the date of birth and gender in PAN and Aadhaar are exactly same. In case of any minor mismatch in Aadhaar name provided, Aadhaar OTP will be required.
In a rare case where Aadhaar name is completely different from name in PAN, then the linking will fail and taxpayer will be prompted to change the name in either Aadhaar or in PAN database.
You can also do the same process after log-in to income tax website. Log in as you normally would and then click on Profile Settings on the top menu. Click on Link Aadhaar. Enter your Aadhaar number and click on Save to continue.
Another option is to link Aadhaar and PAN through SMS. Send SMS to 567678 or 56161 from your registered mobile number in following format:
- UIDPAN<12 digit Aadhaar><10 digit PAN>
- Example: UIDPAN 123456789123 AKPLM2124M
If you have done the linking through ANY one of the above methods, there is no need to do it again.
Why the government wants you to link PAN and Aadhaar
By linking the Aadhaar and PAN cards, the government will be able to keep tabs on the taxable transactions of a particular individual or entity, whose identity and address will be verified by his Aadhaar card.
This will effectively mean that every taxable transaction or activity will be recorded by the government, making tax evasion a thing of the past.
Another reason for linking PAN with Aadhaar is to reduce the occurrence of individuals or entities applying for multiple PAN cards in an effort to defraud the government and avoid paying taxes.
Quick Summary: If you are NRI and if you don’t have Aadhaar card, you don’t have to apply for it (as you are not eligible under current rules). If you already have an Aadhaar card, you can link it with PAN using any one of the above three methods.
Sources: UIDAI , Financial Express , Clear Tax , Business Today , NDTV , Gulf News , Business Standard , Aadhaar Act 2016