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Indian government may allow citizens to use Aadhaar ID for income tax return


The Indian government is considering introducing a new option that would allow individuals who do not have a Permanent Account Number (PAN) card to use an Aadhaar card, according to Economic Times.

The Ratan Watal panel report on promoting digital payments recommended that the government follow the practices of developed countries, such as the United States, in order to increase its tax base.

“The committee studied that in countries like the USA, the tax return can be filed with social security numbers alone without quoting the TIN number or the tax identification number,” unnamed sources told Economic Times. “While we do not have such a provision now, this will help in bringing more people under the tax net.”

Central Board of Direct Taxation and Unique Identification Authority of India (UIDAI) will convene to discuss a technological method that will enable this capability.

One source said that the data currently provided by Aadhaar is insufficient for tax purposes, while another source added that the agencies are trying to figure out “how the data on the Aadhaar platform can be expanded to allow the filing of tax returns”.

The government may consult with the attorney general to find out whether amendments to the income tax act can be made to allow the filing of returns via Aadhaar.

In addition, the Watal committee has recommended that Aadhaar be made mandatory while providing tax returns.

It was reported earlier this week that UIDAI is expected to make it mandatory for manufacturers to embed the Aadhaar encryption key into biometric devices using Aadhaar authentication.

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