The 2023 G20 summit was held in New Delhi, India, on September 9-10, 2023. The main venue was the Pragati Maidan, a large exhibition complex in central Delhi. The summit was also held at other venues in New Delhi, including the Hyderabad House, the Prime Minister's residence, and the India International Centre. The 2023 G20 summit was attended by the leaders of the 20 member countries of the G20, as well as the leaders of several invited countries, including Argentina, Indonesia, Senegal, South Africa, and Turkey. The summit was also attended by the heads of international organizations, such as the United Nations, the World Bank, and the International Monetary Fund. The G20 Delhi Declaration was the outcome document of the 2023 G20 summit. It was a 38-paragraph document that covered a wide range of issues, including: The global economy and finance: The declaration called for continued efforts to strengthen the global economy and financial system. It also emphasized the importance...
The Government of India is speeding up on the road to curbing tax evasion. So, it is leaving no stone unturned in achieving this target. As you know black money was one of the major electoral promises of the NDA (National Democratic Alliance) government in 2014, so it is taking all the coordinated efforts in this direction one after another.
With respect to the recent amendments proposed by our Finance Minister, Arun Jaitley in the Finance Bill, GOI on Tuesday proposed to make Aadhaar card mandatory for PAN application and filing income tax returns as well. This move will come into effect from 1st July. Earlier, the Aadhaar Card was optional for both.
According to the amendment, existing taxpayers will have to link their PAN cards with Aadhaar numbers by a certain date to be specified later. And the new PAN applicant will be required to declare their Aadhaar numbers in the PAN application itself. Those, who fail to disclose their Aadhaar number, their PAN and income tax return will be deemed invalid. For the existing taxpayers who don’t have Aadhaar allotted in their name will have to enrol themselves immediately and they can file their tax returns using this enrolment number.
This move will pose challenges for foreigners and NRIs staying outside India, who have to file tax returns in India for any reason or are required to quote the PAN in respect of certain financial transactions, in case if it is deemed invalid due to non-linking to Aadhaar. As per the amendment, the government is expected to provide relief in reasonable cases, by putting certain exceptions for this mandatory Aadhaar rule.
Linking Aadhaar number to PAN will lead to a more authentic tax filing and increased tax collection. It will help in reducing tax fraud and evasions, which was seen in past where the same person filed taxes against multiple PAN cards. Therefore, if you apply for PAN card, then you will have to provide your Aadhaar or 12-digit unique ID, which is backed by biometrics like fingerprints and iris scans stored in a central repository. This way, the government will be able to identify the real PAN holder through Aadhaar biometric. Also, linking Aadhaar to PAN and I-T returns will be helpful in strengthening the rules governing cash transactions after demonetization.
The real essence of this whole discussion is the government’s intention behind this rule. This move will help in identifying tax evaders and people will multiple PANs. It is aimed at mapping all your financial and other transaction to your PAN through Aadhaar. The government is already making necessary amendments in various laws for linking Aadhaar to most of your financial and property transaction. So, if the Aadhaar gets linked to your PAN, then the tax department will have all the information relating to your financial transactions and belongings. Hence, it is meant to aid government’s drive against black money.
So, taxpayers July 1st onwards, you should not only carefully analyse tax implication of all your financial transactions but, also make sure to report it correctly in the tax returns. Cause, failing to do so will immediately attract tax department’s attention.
You can say that slowly the government is taking a step closer to give Aadhaar the status at par with social security number (SSN) in the USA. Moreover, you cannot refute the possibility that the Aadhaar may sooner or later replace PAN. Another possibility is that majority of your tax related details will be auto populated in your tax return form, and you may just be required to either approve or deny it. However, this is a long time bet due to various consequential changes that will be required in TDS and AIR reporting.
Earlier, the Supreme Court of India had stated in its judgement that Aadhaar should not be mandatory for availing direct benefit transfer of domestic LPG subsidy or for any other government scheme. But, in the aftermath of this bill becoming a reality, you will be left with no option than to follow it.
Comments
Post a Comment