Aadhar Card and Taxes – What You Need To Know About The Finance Act

Maybe you never got your Aadhar card made because you already had other supporting documentation that helped you get by. Maybe, you are paranoid about sharing your biometric data with the government, or just plain lazy. Whatever your excuse for not adding this piece of paper to your arsenal of identity proofs, you can now throw all of them out the window!


New Rule

According to the Finance Act 2017, if you haven’t linked your PAN card to your Aadhaar by July 1st of 2017, your PAN card will be invalid. This is as per section 139AA of the Income Tax Act. Your Income Tax Return must mention Aadhaar Number effective 1st July 2017. This rule is applicable if you are eligible for Aadhaar. Anyone who is a resident in India is eligible to get Aadhaar.

Who is eligible for Aadhaar Card?

Mandatory quoting of Aadhaar card or Enrolment ID will only apply to a person who is eligible to obtain Aadhaar number. ‘Resident’ here is as defined by the Aadhar Act, 2016. Resident as per the said Act means an individual who has resided in India for a period or periods of 182 days or more in the 12 months immediately preceding the date of application for enrolment.

This would also include expatriates who have been living in the country for 182 days in the 12 months before applying for enrolment. The expat community in the major metros of the country is already worried about this additional and, in their opinion, unnecessary compliance requirement. There are about 35,000 estimated expats in India with PAN and other documents required to carry on a business. However, the new rule makes it mandatory for them to obtain an Aadhar card just to keep their PAN active and continue doing business. It is also being said that Aadhar might become necessary for expat families with joint accounts.

The major concerns raised by the expat community centre around the wariness to share biometric data with the Indian government. While the process may be easier for citizens, expats who have had run ins with the bureaucracy before are hoping that the community will be granted an exemption soon. Tax consultants are lobbying for the same.

If you want to know how to mention your aadhaar enrolment number in your income tax return form – read here.

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One Response to Aadhar Card and Taxes – What You Need To Know About The Finance Act

  1. RupeeVest April 6, 2017 at 4:08 pm #

    Informative article.