Permanent account numbers (PAN) not linked to Aadhaar cards will likely become invalid after December 31, a government source said on Thursday, as the Centre pushes to widen the use of the 12-digit biometric identity project.
Currently, all taxpayers need to have a PAN number to file income tax return but others, such as students outside the tax bracket, also use the card as a proof of identity.
The government says many of these PAN cards are fraudulently obtained, a practice that can be checked by a unique identification number.
The official – who refused to be quoted as he isn’t authorised to talk to media – said the government had arrived at the tentative cutoff date of December 31 as it believed the Aadhaar enrollment process will be complete by the end of the year.
“Considering that 98% of the adult population is Aadhaar card holders, a time frame till the end of the year is more than adequate for linking PAN with Aadhaar,” said State Bank of India group’s chief economic adviser Soumya Kanti Ghosh.
More than 1.08 billion Indians have the unique identification number that was aimed at plugging leaks in the distribution of government entitlements and benefits.
Over the past few years, the Centre has linked Aadhaar to a growing list of subsidies and schemes, such as the mid-day meal.
On Wednesday, the Lok Sabha passed a controversial bill that made Aadhaar mandatory for filing income tax returns or applying for a PAN card.
According to the amendments in the finance bill, taxpayers can’t file income tax returns from July 1 if they fail to quote the Aadhaar number or show proof of having applied for the document.
At present, there are 250 million PAN cards that are mandatory for cash transactions of hotel or travel bills exceeding Rs 50,000. It is also mandatory to quote the number for purchase of jewellery above Rs 2 lakh either in cash or by plastic money, and while making large deposits in banks.
But the government says many of those PAN cards are duplicates or obtained through fraud.
