Mandatory Linking of Aadhaar and Exemptions from Income Tax Department


With Aadhaar being mandatory for filing ITR, there are several consequences for not linking the same. Below is in detail consequences.

  • Most immediate impact will be on filing of ITR. As earlier notified by Government, no ITR shall be accepted within Adhaar being linked to the PAN. However, there are some exemptions discussed later on this article.
  • Further, for those who don’t care for filing of ITR, government has made clear that they need to link Aadhaar to their PAN or else the PAN allotted earlier shall be cancelled from the date as to be notified by Government.

But cancellation of PAN doesn’t mean that it will exempt taxpayers from liability of filing taxes. Rather it will increase their liability for default in filing in instances where even though they want to file the returns. With Aadhaar being made compulsory for allotment of PAN post July 1, such assessees will not be able to get new PAN without first providing their Aadhaar. Also at present under Income Tax Act 1962, having multiple PAN card is an offence that attracts penalty of INR 10,000. Though government has not notified the date of cancellation of such PAN that doesn’t have Adhaar linked to it and neither has provided status for such PAN as to whether they will be deleted or only suspended, it is imperitive that government will assure itself of any loopholes and prevent users from getting new PAN after getting the earlier one cancelled by effect of cancellation to evade prosecution for any offences committed before.

Exemptions provided

Although section 139AA has been added as part of the Income Tax Act, relaxation for not complying the same hasn’t been provided by section. Exemptions provided are temporary in nature applied vide notification. Hence such exemption will be removed in future. However, at present it does provide relaxation for below mentioned people:

  • Non Residents. Although Non Residents were earlier covered by the section 139AA and no specific exemptions were provided, Government has decided to relax the norms as many non residents still doesn’t have Aadhaar but are required to file return on account of having income either accrued or deemed to be accrued in India.
  • Residents of Assam, Jammu & Kashmir and Meghalaya. As their lack of coverage of Aadhaar centers in these states, Government has extended the relaxation to these states.
  • For people who were of 80 years of more at any date during the previous year.
  • Person who is not a citizen of India.

However, above mentioned relaxation are not in general but for specific cases where above mentioned persons are exempted from compliance under section 139AA only and only if –

  • they do not have Aadhaar No. allotted to them; and
  • they also do not have any enrollment no. of enrollment for Aadhaar.

So, all those as notified in the above notification 1513(E) dated May 11, 2017 are still required to link their Aadhaar to their PAN if they have either Aadhaar No. alloted to them or they have applied for the same and enrollment no. was alloted to them.

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