180 million PAN cards not linked to Aadhaar numbers may become defunct by March: Report

The move is make tax evaders pay their dues

About 180 million permanent account numbers could become obsolete if not linked with Aadhaar by March 31, according to a Hindustan Times report, quoting sources from the Income Tax department.

The IT department is taking this step to nab tax evaders who use multiple PANs to conduct high-value transactions. The government might also track individuals' spending patterns if they find large sums being spent on luxury items but low income being reported to evade tax, the report said.

Read: You may be fined Rs 10,000 if you don't link PAN with Aadhaar, and here's why

The department gets an account of these details from banks, financial institutions, mutual funds, credit card companies, etc.

Naveen Wadhwa, deputy general manager at Taxmann, a consultancy, told the publication: If PAN is not yet linked with Aadhaar, there is a possibility to obtain multiple PANs. Once a PAN is linked with an Aadhaar, it will not be possible to obtain multiple PANs.”

“It is surprising that in a population of 1.3 billion only 15 million contribute to the I-T kitty. Prime Minister Narendra Modi had also pointed this out recently. Available data suggest that there is an urgent need to expand the tax base,” the report cited an IT department official saying.

According to the report, there are 50.95 crore PAN cardholders in the country as of June, but only 6.48 crore of them file income-tax returns (ITR), and only 1.5 crore actually pay tax.

Another official told the publication that some people use multiple PAN cards to hide high-value transactions and keep themselves out of the tax net. “As a result, only 327.1 million PANs are linked with Aadhaar. More than one-third PANs could be under the scanner unless linked with Aadhaar before March 31,” he said.

The government may also include payments such as education fee and electricity consumption above Rs 1 lakh, domestic business class air travel, gold or white goods above Rs 1 lakh, property tax above Rs 20,000, life insurance above Rs 50,000 and health insurance premium above Rs 20,000.

Wadhwa said the proposed move of the government to expand the list of expenditure would not cause any incontinence to honest taxpayers. The government zeroes in on only those cases that manifest a larger gap between the returned income and expenditures, he added.