Good news! Use Aadhaar card for cash transactions of over Rs 50,000, but PAN card not dead
In what comes as a major good news for the general public, Aadhaar card can now be quoted for cash transactions of more than Rs 50,000 and all other purposes where traditionally income tax PAN card number was a must.
In what comes as a major good news for the general public, Aadhaar card can now be quoted for cash transactions of more than Rs 50,000 and all other purposes where traditionally income tax PAN card number was a must. Revenue Secretary Ajay Bhushan Pandey told PTI on Saturday that banks and other institutions will update their back-end process to ensure that Aadhaar card is accepted for such transactions. The statement came a day after the Finance Minister Nirmala Sitharaman announced in the Parliament that the government would allow interchangeability of PAN card and Aadhaar card for ease of compliance of taxpayers.
"Today you have 22 crore PAN cards which are linked to Aadhaar. 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 said. Pandey also clarified that Aadhaar card can be used for deposit or withdrawal of cash worth more than Rs 50,000 from bank accounts in place of PAN.
As per the current rules, it is mandatory to quote PAN card for cash transactions, such as hotel or foreign travel bills, exceeding Rs 50,000. PAN card is also mandatory on purchase of immovable property of over Rs 10 lakh. The rule is in place to curb the use of black money.
However, Pandey ruled out the possibility of phasing out PAN card by saying that people would always have a choice to either quote Permanent Account Number (PAN) or Aadhaar wherever required. "Because there are some people who are comfortable on PAN," he said. "So PAN and Aadhaar both will exist because some people may prefer to use Aadhaar, some people may prefer to use PAN. But at the back end, for every PAN there will be an Aadhaar."
Of the over 41 crore PANs issued, 22 crore have been linked to Aadhaar card. Section 139 AA (2) of the Income Tax Act says that every person having PAN as on July 1, 2017, and eligible to obtain Aadhaar card, must intimate his Aadhaar card number to the tax authorities. After the Supreme Court upheld Section 139AA of the I-T Act, the government in March extended the deadline for linking PAN with biometric ID Aadhaar by six months till September 30.
However, quoting of Aadhaar is mandatory for filing income tax returns (ITRs), following the Supreme Court order.