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Aadhar- Soon To Be a Mandate Document For Filing Income Tax Returns

Introduction

Aadhar card, a unique verification document issued by UIDAI would be mandatory for filing income tax returns from 1st July 2017 as per Section 139AA of the Income Tax Act. However, the Public Interest Litigations challenging these decisions of the Central Board of Direct Taxes is under hearing in Supreme Court. (https://uidai.gov.in/about-uidai/about-uidai.html)

Announcement in Union Budget 2017 Related To Aadhar Card

(ref: http://www.aadharupdate.in/compulsory-to-provide-aadhaar-card-for-filing-income-tax-from-1-july-onwards/)

As per the latest announcements made in the Union Budget 2017, Aadhar card would be required to be linked with the PAN card and would be necessary for filing income tax returns. In the future, various steps would be taken to link the Demat accounts with the Aadhar card.

Section 139AA of Income Tax Act

(ref: http://search.incometaxindia.gov.in/pages/results.aspx?k=section%20139AA)

The recently introduced Section 139AA makes it compulsory to mention Aadhar number (for those who are eligible to obtain Aadhar Card) for:

1. Application of Permanent Account Number and

2. Filing of Income tax returns

For those individuals who do not have an Aadhar card, they need to enroll for the same and provide their enrolment number of the Aadhar Application form.

As per Section 139AA (2), the individuals holding PAN card as on 1st July 2017 need to provide their Aadhar number to the Income tax authorities. It is also specified that the Permanent Account Number allocated would be considered invalid in case of failure to provide the Aadhar number before the prescribed date.

Clash between Supreme Court and CBDT in Regards to Section 139AA

The Binoy Viswam v Union of India case has raised certain questions with regard to the validity of Aadhar card and has questioned the entire system of issuance of the Aadhar card. Section 139AA was also questioned to be coercive in nature.  Also, the Supreme Court received many other Public Interest Litigations challenging Section 139AA issued by Income Tax of India. The next hearing pertaining to this matter is scheduled on 27th June 2017.

Recent Standing

Till there is no contrary verdict or amendment with subject to Section 139AA, it would be mandatory to provide the Aadhar number for the PAN application and filing of returns. It would also be mandatory to link your Permanent Account Number with the Aadhar Number.

 

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