Through the Finance Act of 2017, the government released a notification making the linkage of PAN and Aadhaar mandatory. By the 31st of March, 2021, both documents were expected to be linked. The government officials put forward this decision to extract an individual’s Aadhaar number when submitting taxes.
The majority of people are still unaware of the needs and benefits of having a PAN and an Aadhaar Card. People frequently mix up these documents, despite the fact that they are both needed for identification purposes. These cards are frequently used for establishing and validating the cardholder’s identity. Apart from this identity proof commonality, there isn’t much else that would lead one to believe that an Aadhaar card and a PAN card are the same things. To bust this myth, we have outlined the fundamental differences between a PAN and an Aadhaar card. Let’s start with the basics: what these cards are for and why they are needed.
Do you know What is PAN?
To begin with, the PAN card is a vital tool to file income tax returns together with any other type of tax correlated to the economic and financial activity of the individual or company who holds the card. As a result, the paramount objective of the PAN card is to ensure that the bearer is a law-abiding Indian taxpayer.
As a result, the PAN card (Permanent Account Number Card) is regarded as obligatory for everyone who earns any type of revenue within a fiscal year. It is a key document that ensures that any large financial, investment, enterprise, as well as an economic transaction, goes smoothly without causing any legal snags. This is also why foreigners and corporations doing business or earning revenue in the country are obliged by law to get a PAN card from the authority.
The PAN card is a combination of alphabets and numerics to provide the cardholder with a unique alphanumeric identity. Its main purpose is to make sure that the cardholder doesn’t escape from liable taxes. As a result, only the Income Tax Department is liable to issue PAN cards to the authorised PAN centres.
Do you know What is Aadhaar?
The Aadhaar Card, on the other hand, is primarily designed to establish the identity of the cardholder. As a result, it is only offered to residents of India on a voluntary basis. The presence of a unique identifier ensures that only the legitimate residents get access to the government’s subsidised services, such as food, water, ration, as well as fuel and gas subsidies.
In addition to the usual personal information collected during the application process, Aadhaar card holders are also required to provide biometric information.
PAN vs Aadhaar
The biggest source of confusion for many individuals is the fact that PAN and Aadhaar cards are used as proof of identity, leading them to believe that this is their only primary purpose. Both documents, in fact, are fundamentally distinct from one another and serve a considerably more vital purpose in one’s life. Without further ado, let’s take a look at the difference table between PAN and Aadhaar card.
| Parameter | PAN Card | Aadhaar Card |
|
Known By the Name of |
|
|
|
Denotes |
Permanent Account Number or PAN |
|
|
Used in (Country) |
India |
India |
|
Issued by (Department) |
Indian Income Tax Department |
UIDAI – Unique Identification Authority of India |
|
Obligatory |
Compulsory to make financial transactions |
Voluntary |
|
Digits |
10 Digits in the combination of alphabets and numbers |
12 Digits comprising of numbers |
|
Required Data |
|
For Biometric purposes, photograph and fingerprints along with the iris scan. Applicant’s Name, Date of Birth, Residence Proof and Signature |
|
Functionality |
To identify payable taxes along with the financial transactions |
To identify eligible welfare schemes |
|
Objective |
Identification of carried out financial transactions as well as prevention of tax evasion |
To offer a unique identity and prepare a database comprising of everyone’s information to eradicate identity fraud |
|
Residence |
PAN card is issued to Indian and Non-Indian citizens conducting business across India |
Aadhaar card is issued only to Indian citizens as well as residents |
Bottom Line
In a nutshell, PAN and Aadhaar Cards are two vital documents that you must have a digital copy of them on your phone. The government is attempting to link every Indian resident’s PAN and Aadhaar card with the objective to make the lives of Indian citizens easier. If you have both cards, you can easily link them to make your financial transactions seamless.
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