UIDAI, Income Tax Return Update: Who does not have to quote Aadhaar number with PAN, ITR filing? I-T dept clarifies

Aadhaar-PAN linking: March 31 deadline has ended, and once again a good news has been given to Indian citizens. The Income Tax Department has extended the deadline to link Aadhaar number with Permanent Account Number (PAN) card now by end of September 2019. This would be a six months breather to all those who have not linked the 12-digit biometric with their PAN. Even though deadline to link PAN is extended, for a taxpayer one must start quoting their Aadhaar number with the 10-digit laminated PAN, otherwise, they would not be able to file their Income Tax Return (ITR) from April 01. The department has firmly said, it is mandatory to quote Aadhaar number for filing the return as required under section 139AA(1)(ii), unless they are exempted under sub section 3. Now there are many questions that arise in the mind of a citizen on whether their PAN card will become valid if not linked with Aadhaar, however, there are certain people where there it is not necessary to link Aadhaar. 

Firstly, let’s understand the section 13AA. It says, every person who is eligible to obtain Aadhaar number shall, on or after the 1st day of July, 2017, quote Aadhaar number. This needs to be done in two places namely for application form for allotment of permanent account number (PAN) and for filing ITR. 

If a person does not possess the Aadhaar number, they can quote enrolment ID of Aadhaar application form issued to him at the time of enrolment. This enrolment id can be quoted in PAN application and ITR filing. 

But the section 139AA sub-section 2 says, every person who has been allotted permanent account number as on the 1st day of July, 2017, and who is eligible to obtain Aadhaar number, shall intimate his Aadhaar number to such authority in such form and manner as may be prescribed, on or before a date to be notified by the Central Government in the Official Gazette.

In case of failure to intimate Aadhaar number, the PAN card allotted to that person will become invalid. 

However, the last part of the section which is sub-section 3 reveals that, Aadhaar quoting will not be mandatory to that person or state as notified by government. 

The sub-section involves two clause as well - "Aadhaar number", "Enrolment" and "resident" shall have the same meanings respectively assigned to them in clauses (a), (m) and (v) of section 2 of the Aadhaar (Targeted Delivery of Financial and other Subsidies, Benefits and Services) Act, 2016 (18 of 2016).” And "Enrolment ID" means a 28 digit Enrolment Identification Number issued to a resident at the time of enrolment.'.

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For example, the state of Jammu & Kashmir has the breather of not linking Aadhaar with PAN or ITR filing. 

But did you know as per the Aadhaar Act, 2016, Aadhaar is mandatory to those citizens who qualify for the term resident of India and are the ones to follow it mandatorily. The act states that, individual is called as resident of India, if he or she has stayed for 182 days or more in twelve months immediately preceding the date of Aadhaar enrolment. They are the ones eligible.

Hence, ClearTax in its report states that, residential status as per Aadhaar Act is more relevant than residential status as per the Income-tax Act, 1961. One must note that there could be a possibility that a taxpayer could qualify as a resident under the provisions of income tax whereas would qualify as a non-resident for the purpose of Aadhaar Act. In such cases, such taxpayers would be given the benefit of non-quoting of Aadhaar number in their return of income.

Hence, if you fall under the bracket of section 139AA sub-section 3 or is not a resident of India, then do not worry even if you miss the deadline. However, it is advisable to link your Aadhaar number with PAN, because there are host of services and benefits that you can avail in your investment and savings.