The Aadhaar card can now be quoted for cash transactions of more than Rs 50,000 and for all other purposes where quoting Permanent Account Number, or PAN, was mandatory, PTI reported on Saturday quoting Revenue Secretary Ajay Bhushan Pandey.
Pandey said banks and other institutions will make back-end upgrades to accept Aadhaar in place of PAN card.
In order to curb black money, providing PAN was made mandatory for cash transactions like hotel or travel bills exceeding Rs 50,000. PAN is also necessary to purchase immovable property of over Rs 10 lakh.
Finance Minister Nirmala Sitharaman had proposed in her Union Budget speech to allow the use of Aadhaar number in place of PAN in cases such as filing income tax returns. Sitharaman had said that this will allow those who do not have a PAN card to give their Aadhaar number whenever needed.
“Today you have 22 crore PAN cards which are linked to Aadhaar,” Pandey said. “You have more than 120 crore people who have Aadhaar. Then supposing somebody wants PAN, he has to first use Aadhaar, generate PAN and then start using it. With Aadhaar the advantage would be he now does not have to generate PAN. So this is a great convenience.”
Pandey confirmed that Aadhaar can be used in place of PAN when a person deposits or withdraws cash more than Rs 50,000 from a bank account.
Pandey, however, added that PAN will be not be phased out. “Don’t see any need for phasing it out, it’s people’s choice,” he told Moneycontrol. “Your PAN base indirectly moves from 22 crore to 120 crore. PAN and Aadhaar both will exist because some people may choose to use one over the other. But at the backend, every PAN will have an Aadhar and every Aadhar will have a PAN.”
In September 2018, the Supreme Court made Aadhaar optional for mobile phones and bank accounts but said it would still need to be linked with Permanent Account Numbers to file income tax returns. The verdict had come after several petitioners raised concerns about privacy, and asked why the unique identity number was made mandatory for people to avail of welfare schemes, file income tax returns, hold mobile numbers, and bank accounts.
After the Supreme Court upheld Section 139AA of the Income Tax Act, the government in March extended the deadline for linking PAN with Aadhaar by six months till September 30. Quoting of Aadhaar is mandatory for filing income tax returns, following the Supreme Court order.