Site icon Blog by Quicko

Aadhaar is now intertwined with Tax Filing

Aadhaar is a 12 digit unique identity number issued by the Government of India. Unarguably, Aadhaar has been subject to several misconceptions and debates over the course of time. Regardless of which side you sway on the Aadhaar Validity Conundrum, Aadhaar Card has intertwined on so many levels for Tax purposes, that it has become the essential Document in India.

Linking PAN With Aadhaar Mandatory

Earlier the deadline for Linking Aadhaar with PAN card was March 31, 2020. But Due to the COVID-19 crisis, it has been pushed to June 30, 2020. The purpose behind Linking PAN and Aadhaar is for Verification and Registration purposes. Essentially, it will help the Income Tax Department(ITD) to keep a tab on Tax Evasion. Another reason for linking PAN with Aadhaar is to minimize the incidents of individuals/entities applying for multiple PAN cards. Not only that, Linking PAN with Aadhaar will help the ITD in tracking High-Value Transactions.

Reporting Aadhaar in ITR 

One of the major announcements made in Budget 2020 is the interchangeability of PAN and Aadhaar for Tax Filing Purposes. Meaning that Individuals who do not possess a PAN Card can use Aadhaar as a valid Document to file Income Tax Returns. This step was lauded as a major move towards simplifying India’s Tax Compliance System. As individuals who do not possess a PAN Card can file ITR through quoting Aadhaar in their Income Tax Returns. Specifically, Individual Residents either needs to mention the Aadhaar Number or Aadhaar Enrollment ID for filing their Income Tax Returns.

Aadhaar based e-verification of ITR

Everyone agrees that Aadhaar based e-Verification of ITR has not only simplified the Tax Compliance by streamlined it. Earlier, in order to verify an ITR, an individual had to download a 1-page ITR Verification Form (ITR-V) and then send the signed copy of ITR-V to Bengaluru for Verification. Instead, e-Verification can be done in just 4 easy steps and in less than 5 minutes. There are other ways like Net Banking, Bank Account, Demat Account, and DSC. So Aadhar bases e-verification just adds to the plethora of verification options available.

Aadhaar being part of new Form 26AS

Form 26AS is a consolidated Tax-Credit Statement that provides information related to details of TDS, TCS, Advance Tax, Self Assessment Tax, Income Tax Refunds, and any high-value transactions. To solidify Aadhar’s stature in Indian Tax Infrastructure, the Ministry of Finance announced on new avatar Form 26AS, effective from June 1, 2020. The Form will be divided into A and B. While Part A will have the Aadhaar information, D.O.B, and contact details, Part B will include details of Property & Share Transaction Details, Status of Proceeding with ITD, and Status of IT Refund/Demand. According to experts, the new Form 26AS will assist the taxpayers to identify and take corrective action, in case any incorrect information/ detail is reported in Form 26AS.

Aadhaar based e-KYC

e-KYC is an electronic version of KYC administered by the Unique Identification Authority of India (UIDAI). KYC i.e Know Your Customer is important documentation needed in India for doing many activities such as opening a Bank Account or buying a Sim Card. Aadhar based e-KYC has minimalized the time required for a KYC. Its data is downloadable by Aadhaar number holder is digitally signed by UIDAI to verify the authenticity and detect any tampering. Individuals can apply for e-PAN through Aadhaar based e-KYC.

Exit mobile version