The government will invalidate all PAN cards that are not linked to Aadhaar by September and once the Income tax department cancels the PAN card, it can’t be used again. To validate and continue using the existing PAN cards, citizens will have to necessarily link them to Aadhaar.
As per recent data, currently 180 million out of the existing 400 million PAN cards are not linked to Aadhaar.
The decision was made as a result of reports received by the Income Tax Department about its illegal use for making loans or getting a credit card. Moreover, there are some people who use it as an identity proof in Nepal and Bhutan.
Every time an Aadhaar is used to buy something, at the back end a PAN number will be generated and sent to the user. Those who cite an Aadhaar number, which is not already linked to a PAN number, for tax returns and other specified transactions after 1 September, will get a fresh one from the Income Tax Department.
Meanwhile, Finance Minister Nirmala Sitharaman in her Budget speech on Friday said that she was making a proposal to make Aadhaar interchangeable with PAN.