India’s national biometric ID Aadhar Card number can now be quoted for cash transactions of more than Rs. 50,000 in place of PAN card number. Traditionally, any person who wants to make cash deposit / withdrawal of more than Rs. 50000 in banks was required to specify his PAN Card number. But now, this cash deposit / withdrawal in banks can be done easily using the Aadhar number as govt. makes PAN-Aadhaar interchangeable.
FM Nirmala Sitharaman in her 1st ever budget of Modi 2.0 has allowed interchangeability of PAN and Aadhaar for ease of compliance of taxpayers. This move of allowing people to quote Aadhar for Cash transactions beyond Rs. 50k in place of PAN number follows the Union Budget 2019-20.
It is also clear that PAN card is not going to be phased out and would not be replaced completely by Aadhar card.
Aadhar Number Instead of PAN for Bank Deposit / Withdrawal over Rs. 50k
Now people can make cash deposit / withdrawal in banks with more than Rs. 50,000 amount of money using their Aadhaar number in place of Permanent Account Number (PAN). Banks and various other institutions are going to make backend upgrades to allow acceptance of Aadhar in places where quoting PAN was mandatory.
PAN-Aadhaar Interchangeability for Cash Transactions
Till date, there are 22 crore PAN cards which are linked to Aadhaar while there are around 120 crore aadhar card holders. If anybody wants PAN number, then he / she has to first use aadhaar, generate PAN and then start using it. However with Aadhaar, people would not be required to generate PAN which is of great convenience.
To curb black money, quoting of PAN is compulsory for cash transactions such as hotel or foreign travel bills exceeding Rs. 50,000. PAN card number is also mandatory for purchase of immovable property above Rs. 10 lakh. But there are instances where people quote wrong PAN number or obtain PAN card fraudulently. As Aadhaar number is backed by the biometric data of the citizens, so it is completely safe.
Whether PAN Card Would be Phased Out
The answer to this question “Whether PAN would be phased out” is “No” as some of the people are comfortable with PAN. People will have a choice to wither quote their PAN card number or Aadhar card number. Both PAN and Aadhaar will co-exist as some people prefers aadhar and some prefers PAN. But at the backnd, for every PAN there would be an Aadhar.
Aadhaar Instead of PAN for Fling IT Returns
Previously, finance minister has proposed to allow those who do not have PAN number to file income tax returns by simply quoting their Aadhaar number and also use it wherever they are required to quote PAN. The govt. has already issued around 41 crore PAN cards out of which 22 crore have been linked to Aadhaar.