08 Aug

Linking of Aadhar Card and PAN Card- Boon or Bane?

The Identity Crisis:

Through the Finance Act of 2017, the government set the 1st of July 2017 as the deadline for linking one’s PAN and with the Aadhaar number. Non-adherence would, in turn, lead to an invalidation of the PAN Card.The repercussions of this are all but discernable including an invalidation of one’s PAN Card.Therefore, it will no longer serve as an identity proof thereby debarring the defaulter from transactions that cannot be carried out without quoting PAN. The PAN Card is a 10 digit alphanumeric number issued by the Income Tax Department for tracking financial transactions.

The PAN Card is essential as, without it, one would not be permitted to buy property worth more than 1 lakh.The Aadhaar Card, however, is a 12 digit number code issued by the Unique Identification Authority of India (UIDAI) creating a unique, universal identity for Indian citizens that would negate the need for different documents to avail of certain services. It also serves as address proof anywhere in India.

What the linking of Aadhar Card and PAN Card entails?

The outcome of this decision is perceived to bear a number of repercussions, few discussed below:

  1. Firstly, that the linking of Aadhaar Card and PAN Card would automatically mean the linking of Aadhar Card and Bank Accounts. According to Amit Maheshwari who is a partner at Ashok Maheshwari & Associates LLP, “As the bank accounts of the person would already have PAN as his/her KYC requirement, once Aadhaar is linked with PAN, it will certainly lead to an automatic link with the bank accounts as well.” This essentially means that the government can monitor financial transactions
  2. Secondly, that the government is attempting to solve the problem where people have multiple PAN Cards and file tax returns with those. Thereby, from July 1st, 2017, only Tax Returns connected to an Aadhaar Number will be accepted. Since Aadhaar is based on biometrics, chances of duplication are much less thereby making the system full-proof.

The opposition against linking Aadhaar and PAN card:-

Although the move appears to be a step in the right direction, it is not without opposition. Firstly, that there is no notification from the RBI to link the Aadhaar and the PAN Card. According to Sanjay Silas, President of, Branch Banking, Axis Bank, “The government has come out with a requirement of quoting or filing of income tax returns. As a bank, we are guided by RBI’s KYC/PML guidelines which stipulate acceptance of one of the six official documents required for opening of an account, of which PAN card and Aadhar are a part. There is no requirement for an individual to produce both the documents for opening of a bank account.” The major resistance to the linking is that of privacy.

Earlier this year, ace cricketer MS Dhoni was in the news for having his Aadhar details leaked. The conundrum, however, goes much deeper than that. The linking of the Aadhaar and PAN Card essentially leads to the unveiling of financial details and transactions of the parties involved.

Finance Minister Arun Jaitley attempted to address a number of concerns. He was primarily of the view that the nation must move on from debating issues dealing with privacy rather look to debate on compliance and creating a more ethical and a more compliant country.

Further, that the government has taken stringent steps under the stringent Benami Transactions (Prohibition) Amendment Act, 2016 that provides for confiscating properties of those who use the name of other people to convert unaccounted wealth into white. All in all, one can conclude that the move seems to have been taken with the right intention.

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