There appears to be a lot of ambiguity around the role of Aadhaar for the purpose of return filing especially in the background of the Supreme Court decision which ruled that a PAN would continue to remain valid even if Aadhaar is not obtained and linked with PAN. This article makes an attempt to bring in an element of clarity in this regard.
1. Quoting of Aadhaar in the return of income
Section 139AA was inserted into the statute books vide Finance Act 2017 wherein it imposed the following mandates :
a. Every person who is “eligible to obtain an Aadhaar”, must quote the Aadhaar number in the PAN application form as well as the return of income with effect from 1 July 2017.
b. Those who did not possess the Aadhaar number could quote their Aadhar enrollment ID in the return of income.
c. Every person who had been allotted PAN as on 1 July 2017, and is eligible to obtain an Aadhaar number, must intimate his Aadhar number to the tax authorities by linking Aadhaar with his PAN after he obtains an Aadhaar number
d. Failure to intimate Aadhaar number would lead to the PAN being considered invalid.
2. Supreme court ruling on Aadhaar PAN linking
The constitutional validity of this section 139AA came into question before the Hon’ble Supreme Court (SC). The SC, in its judgement upheld the constitutional validity of this section in entirety except for providing a partial relief. The relief was in respect of Point (d) above where the SC held that non obtaining of an Aadhaar number would not lead to PAN becoming invalid.
Accordingly, all other provisions of Section 139AA in respect of quoting Aadhaar or Aadhaar enrollment number in the return of income or linking of Aadhaar with PAN etc would continue to hold good.
Ref : Press Release dated 10 June 2017 (pursuant to the SC decision)
3. Who is considered “Eligible to obtain an Aadhaar”?
As already mentioned mandatory quoting of Aadhaar or Enrolment ID shall apply only to a person who is eligible to obtain Aadhaar number. According to the Aadhaar Act, 2016, Aadhaar needs to be obtained only by an individual who qualifies as a resident as per the Aadhaar Act. Further, a resident individual is one who has resided in India for a period or periods aggregating to one hundred and eighty-two days or more in the twelve months immediately preceding the date of application for enrolment. Therefore, an individual who is not a resident as per the Aadhaar Act, 2016, need not quote his aadhaar number under Section 139AA.
Here, 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.
Easy and Accurate ITR Filing on ClearTax
File in 7 Mins | Minimal Data Entry | 100% Paperless
4. Deadline for linking of Aadhaar and PAN
The linking of Aadhaar with PAN is a mandate for processing of returns. The extended deadline for linking the two was fixed at 30 June 2018 which has now been further extended to 31 March 2019.
Read our article on How to link Aadhaar to PAN here
To sum up, if you are a resident as per Aadhaar Act, make sure to obtain your Aadhaar number before filing your income tax return as the same needs to be quoted in your return as well as linked to your PAN.