Aadhaar linking with PAN now mandatory for filing Income Tax Return

The Supreme Court’s ruling makes linking of PAN and Aadhaar mandatory for filing IT returns. How this linking is done and why it is necessary, along with the effects and the provisions of the Act it relates to.

Aadhaar linking with PAN now mandatory for filing Income Tax Return

The Supreme Court has ruled that linking of Permanent Account Number (PAN) with the unique national ID (Aadhaar) is now mandatory for anyone looking to file their Income Tax (IT) Return. The bench, comprising Justices AK Sikri and S Abdul Nazeer, effectively upheld Section 139AA of the IT Act that had earlier made this linking mandatory. 

The court’s decision came in response to an appeal filed by the Centre against a Delhi High Court ruling that allowed two persons to file their IT returns without linking their Aadhaar and PAN. The two assessees had pointed out to the High Court that the IT e-filing website didn’t have the option to opt out of Aadhaar linking, which was hampering their tax filing exercise. It was in response to this petition that the Delhi High Court had allowed the filing of return without the linking.

Related: What are the new Aadhaar features- virtual ID and limited KYC and how do they work? 

The bench noted that the assessment of the aforesaid two people for assessment year 2018-19 had already been completed and, therefore, made it clear that from assessment year 2019-20, IT return shall be filed in line with the judgment passed by the apex court. In September 2018, the Supreme Court had declared Aadhaar as constitutionally valid but deemed that quoting it was not mandatory to open/maintain bank accounts, mobile phone connections, and for school admissions. 

Related: Have a look at new PAN rules that is effective from December 5 

What does Section 139AA of the Income Tax Act say?

Section 139AA says that people who are eligible to apply for an Aadhaar number shall do so and quote the Aadhaar number in the application form for allotment of PAN and while filing the IT Return. It further says that if the person does not possess an Aadhaar Number, the enrolment ID of Aadhaar application form issued has to be quoted in the application for PAN or the return of income, as the case may be.

How can one link their PAN with Aadhaar?

One can link one’s PAN with Aadhaar by going to the appropriate website, with or without logging in. If one chooses not to log in, they have to click on the link that says ‘Link Aadhaar’ and enter the PAN, the Aadhaar number, and their name as it appears on the Aadhaar card. If logging in, one has to go to the profile settings and click on ‘Link Aadhaar’. The PAN details will appear and the person has to compare the same with his or her Aadhaar details. If all the information matches, click on the ‘Link Now’ option.

Related: What you need to know about linking your Aadhaar and PAN card? 

Who is affected by this ruling?

It will affect anyone who’s required to file an IT return in India. For such individuals, having an Aadhaar becomes automatically mandatory. Aadhaar can be applied for by any individual, irrespective of age or gender, provided the person is resident in India and satisfies the verification process laid down by the Unique Identification Authority of India (UIDAI). Besides NRIs and PIOs, even foreigners living in India can apply for an Aadhaar card.

Related: If you can score 8/10 on these question, you're an Aadhaar Card pro

Why should PAN and Aadhaar be linked?

The linking will help the government weed out fake PAN cards and eliminate tax evasion or other fraudulent activities. In fact, it can be helpful in identifying tax evaders as well. Laundering of black money can also be curbed once PAN is linked with Aadhaar.


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