The government has launched an intense drive, in recent months to encourage people to link their Aadhar cards to their PAN cards online. While the dates for this have been pushed back due to the magnitude of the undertaking, actual connecting will be required starting in 2022.
There are two things that you should be aware of as investors and taxpayers.
How to link your PAN with Aadhar online? Why should you link your Aadhar with PAN?
The PAN card is a significant tax identification number provided by the Income Tax Department, as we all know. This PAN is required not just for filing IT returns, but also for a range of other transactions such as purchasing jewelry, acquiring real estate, taking out a loan, opening a Demat account, creating a bank account, and so on.
Aadhar is a relatively recent phenomenon in which the UIDAI aimed to issue a biometric and hence more secure identity card to every Indian. You must link your Aadhar card to your PAN card online to file your tax returns in the future.
Here are 5 reasons to link your PAN card and Aadhar card-
The Audit Trail as a Tool for Combating Fraud
By linking the Aadhar Card and the PAN Card, the government has created an audit trail. The Aadhar card is now required for almost all payments, and the connectivity provides the income tax authorities with a full audit trail.
A considerable quantity of black wealth is printed in the economy due to a lack of an audit trail. Because Aadhar is significantly more frequently used than PAN cards, more individuals who have been evading taxes will be caught up in the system, expanding the revenue base.
This will be critical in avoiding revenue leakage. Fake PAN cards used in evading taxes would be easier to spot.
Detecting a Large Number of Pan Cards
By applying for many PAN cards, an institution can use one card for a particular set of financial operations and pay tax affiliated with those operations, while the other PAN card can be used to hide account balances or money transfers from the income tax department, allowing the company to evade taxes on them.
According to the government, it will be extremely difficult for individuals to possess multiple PAN cards, which has become one of the most common methods of evading taxes by spreading money among false PAN cards. As a result, another significant tax loophole has been closed in the system.
Individual Taxpayer Profit
Everyone must pay taxes after their PAN and Aadhaar are linked. Once tax evasion decreases, the government would be able to expand its income base and pass the savings on to you in the form of reduced taxes.
The PAN-Aadhar link would be extremely beneficial for tax filing purposes since it would avoid the requirement for more complex tasks such as submitting receipts to the IT office or e-signature. Using Aadhaar e-verification, the job will be completed automatically.
Returns Are Easier to File
Taxpayers were previously needed to keep their PAN card on them at always times to file taxes, but now they must also provide Aadhaar information.
It will make it simple for payers to submit their application forms. An OTP provided to your Aadhaar-registered cell phone can be used to verify the legitimacy of your returns (ITR-V).
Well-Organized Tax Information
You won't be able to file taxes until your PAN card is connected to Aadhaar, which is expected to happen in 2022. Leaving aside the regulatory issue, your I-T login will give you a single-page view of all your activities.
Your PAN card will not be canceled if you attach your Aadhaar card to it. By linking a summary to Aadhaar for reference purposes, will make it easier to maintain track of one's taxes.
How to Link Aadhar Card to Pan Card Online?
The procedure of linking your Aadhar card to your PAN card is online, and the first step is to create a username and password. The procedure is as follows:
Login to the tax portal (www.incometaxindia.org) with your PAN card details as the username and password to link your PAN card with the Aadhar card. If you're not enrolled on the Income Tax site, you will need to do so before proceeding with the connecting.
There will be a separate space for you to link your Aadhaar with your PAN Card after you log in and reach the secured area of your Income Tax portal. The entire verification process takes place online, with no physical paper involved.
The name on your Aadhar Card must perfectly match the name on your PAN Card. If this isn't the case, connecting your Aadhar Id and PAN card online may be difficult.
There is a new feature provided to solve the problem of name mismatch (which is pretty prevalent). In the event of a name mismatch owing to the usage of initials, the two papers can still be linked using an identical date of birth and a similar cellphone number.
The agency sends an OTP code for verification, and the Aadhar Card and PAN card can then be linked. In reality, it is now possible to link these two documents solely using SMS.
Written by - Nidhi Gupta
Edited by - Gunjan Nagpal
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