Aadhaar, as we know, is being promoted by the central government in a big way. The latest move is a short-term online service for the immediate allotment of a permanent account number, or PAN, to individuals who have an Aadhaar ID.
Individuals who do not have a PAN number can log on to the website incometaxindiaefiling.gov.in, which is run by income tax department, to get what they’re calling an instant e-PAN. A senior income tax department official told the media that the new facility has been introduced to deal with the increasing number of applications by individuals for a Permanent Account Number.
Permanent Account Number, or PAN, is a 10-digit alphanumeric number allotted by the I-T department to a person, firm or entity. It is mandatory to have a PAN if you are undertaking financial transactions like receiving salary, professional fee and sale or purchase of assets above specified limits.
A PAN card also serves as a nationally accepted identity proof for its holder. It also helps with certain purchases.
A PAN card is a mandatory document if you are buying or selling a four wheeler. It is also mandatory to have a PAN card if you intend to take a loan to buy your car. You cannot open a bank account if you don’t have a PAN card. Similarly, for opening a demat account, which holds all your shares in dematerialized or electronic format, a PAN card is necessary. And, last but not the least, if you are buying or selling a house that is worth is more than Rs 10 lakhs, you will have provide your PAN details.
Last year, the Centre had made linking Aadhaar with PAN compulsory to file income tax returns and for any bank transaction over Rs 50,000. As per Section 139 AA (2) of the Income Tax Act, every person having PAN as on July 1, 2017, and eligible to obtain Aadhaar, must intimate his Aadhaar number to the tax authorities.
This new, free instant-PAN service, launched last Friday, June 29th, is only for individuals, not for firms, trusts, companies and Hindu undivided families or HUFs. The income tax department clarified in its advisory, “This facility is free of cost and instant allotment of e-PAN is available only for a limited period on first-come-first-serve basis for valid Aadhaar holders."
This service - allotting an e-PAN on a real-time basis - was introduced to reduce the interaction of individual applicants with the department and help taxpayers generate the permanent account number (PAN) without any hassle.
So here’s how it works: If you are a resident individual, you can log on to the website incometaxindiaefiling.gov.in to get an e-PAN. Goes without saying, if you have your own individual PAN, you don’t need to apply.
Here’s the main point: The applicant needs an active mobile number linked with his or her Aadhaar card number to avail an e-PAN. A one-time password or OTP will be sent to this mobile number. To verify the mobile number registered with the Aadhaar card, the individual applying needs to visit the website of the UIDAI - uidai.gov.in. This is the website of the Unique Identification Authority of India, the nodal body for issuing Aadhaar cards.
Remember when Nandan Nilekani headed something to do with Aadhaar? That was UIDAI. You’ll have to visit their website to verify the phone number tagged to your Aadhaar card.
Once that is done, you’ll receive an OTP, or a one-time password, on that phone number. Once the Aadhaar e-KYC, or Know your Customer, is successful based on this OTP, the process of e-PAN application will start. E-KYC means electronic verification of the applicant. The e-PAN is generated using the details associated with the Aadhaar card number.
In case any of your details associated with your Aadhaar card - like your name, date of birth, gender, mobile number, and address in Aadhaar card number - are not accurate, you need to visit the UIDAI website to update these before applying for an e-PAN.
The applicant will then need to upload a scanned copy of his or her signature on white paper, complying with the specifications given on the income tax website. This is a paperless facility, so no physical documents need be submitted. Your Aadhaar number will suffice.
After filing the application, a 15-digit acknowledgement number will be generated and sent to your mobile number/ email mentioned in the application form.
A permanent account number is allotted to the applicant through his or her electronic Aadhaar-based verification system in a few seconds and the applicant will be sent the PAN card by post, according to government officials. As per data available till March 2018, over 16.65 crore PANs, out of a total of approximately 33 crore, have been linked to Aadhaar.
The Central Board of Direct Taxes, the body that determines policy for the Income Tax department, had recently extended the deadline for the PAN and Aadhaar linking to March 31 next year. It was the fifth time that the deadline for individuals to link their PAN to their biometric ID, or Aadhaar, was extended.
The latest order said the deadline for the PAN-Aadhaar linking for filing I-T returns was being extended after "consideration of the matter". The fresh CBDT order comes after the Supreme Court directed the extension of the March 31, 2018 deadline for linking Aadhaar card with various other services and facilities, including verification of bank and mobile phone customers.
Some analysts have praised this move as a step in the right direction. Kuldip Kumar, partner & leader - personal tax, at consulting firm PwC India, said, “Thanks to the elevated use of technology and digitisation adopted by the government in the tax department, it is now resulting in truly convenient and paperless interface with tax payers. One may expect more such initiatives in the coming days, which will make the life of taxpayers easier for managing their tax affairs.”
However, Aadhaar isn’t exactly winning popularity contests. The usage of Aadhaar dropped to its lowest level in a year last month, declining over 40% from a record 1.48 billion authentications done using the unique identity number in September 2017.
Aadhaar was used 859 million times for authentication purposes in June, according to the Unique Identification Authority of India, which oversees the Aadhaar programme.
Aadhaar-based authentications have declined every month since September, except in March, when they rose to 1.125 billion from 996 million in February, according to the UIDAI website. These low numbers showed up barely three months after the apex court extended the deadline for linking Aadhaar until it delivers the final judgment on its validity and usage.