The government issued a notice which made the linking of PAN and Aadhaar compulsory through the Finance Act, 2017. The linking of the two documents was supposed to be done by the 1st of July. This decision was made to make an individual's Aadhaar mandatory when filing their taxes. Most individuals are not aware about the necessity and benefits of owning a PAN and Aadhaar Card.
Now, what is PAN?
Permanent Account Number (PAN) is a number which is issued to an individual who pays their taxes. It is a 10-digit alphanumeric number that plays a vital role in a majority of various transactions which are made by an individual on a regular basis.
What is Aadhaar?
A 12-digit unique identifier Aadhaar is an ID system which is used by Indian residents and is based on their demographic and biometric data. This personal data of an individual is collected and stored in the databases of the Unique Identification Authority of India (UIDAI).
The government had issued an order which made it mandatory for every taxpaying citizen of India to link their PAN with their Aadhaar Card. This linkage was expected to be done by every individual by the 1st of July.
PAN VS Aadhaar:
The main purpose of a Permanent Account Number is to track and identify every financial transaction that an individual makes. It is issued by the Income Tax Department under the careful supervision of the CBDT or the Central Board for Direct Taxes. The most important job of a PAN is to ensure that every citizen does their duty of paying their taxes.
An Aadhaar Card is a unique identification number of UID which has been issued by a central government agency operating in India called the Unique Identification Authority of India (UIDAI). The government intends on keeping a database containing information about every registered citizen of India. In addition to a person's personal information, it also collects their photograph, fingerprints and iris scans. With this system of information, it becomes very easy to identify an individual by simply cross-referencing their data with the data in the system.
The main confusion that a lot of people face arises from the fact that both documents are used as Proof of Identity which leads people into thinking that this is their primary use. In fact, both documents are completely different from each other and serve a far more important purpose in an individual's life. With this in mind, let us take a look at some of the differences which are listed below:
| Parameters | Aadhaar Card | PAN Card |
| Stands For |
|
Permanent Account Number |
| Also Known As | UID number, UIDAI Number, AADHAR number, UIDAI card | PAN Number |
| Country of Usage | India | India |
| Authorizing Department | Unique Identification Authority of India (UIDAI) | Indian Income Tax Department |
| Terms of Use | Voluntary | Mandatory for Financial Transactions |
| Number of Digits | 12 | 10 (With a combination of both numbers and alphabets) |
| Collected Data | Biometric type:
|
|
| Primary Purpose | To identify and document every Indian citizen to prevent identity crimes and fraud | To prevent tax evasion and to help in identifying every financial transaction that is made |
| Main Function | Identification needed for welfare schemes and plans | Identification for the Income Tax Department as well as identify every financial transaction made |
| Residency | Issued to residents and Indian citizens only | A PAN Card can be issued to individuals who are not Indian citizens but who conduct any type of business in India |
In summary, PAN and Aadhaar Card are two valuable documents that every individual should possess to carry out various activities smoothly in day to day life. With efforts underway to ensure that every individual residing in India links their PAN and Aadhaar Cards, the government is keen to make the lives of the people of India a lot simpler. With this linking, an individual can register for a PAN Card by using their Aadhaar Card.
