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Saturday, 25 March 2017 00:00
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Sarthak's edit

Jaitley does well to stress its anti-evasion properties

Finance minister Arun Jaitley has done well to answer critics of his compulsory Aadhaar-PAN linkage by saying that if there is a new solution to tackling tax evasion, he will use it. While it is true that the PAN card is the fulcrum around which today’s tax-evasion strategy is built, there are simply too many fake PAN cards. So, well-heeled individuals use multiple PAN cards to show smaller income levels, for instance. Though PAN card details are sought for high-value purchases like automobiles and jewellery, to the extent the PAN card is a fake, the chain breaks down and the transactions remain secret from the taxman. Similarly, with not all bank accounts declared to the taxman, this becomes another way to hide incomes and expenditures.

 

The compulsory seeding of all PAN cards with an Aadhaar number solves many of these problems. Once this is done, no individual can have more than one PAN card. And, with some authentication at the user end—say, an OTP while buying a car based on a PAN card which, in turn, is linked to an Aadhaar number—the taxman will get all details of high-value transactions. With this link nicely sealed, and the mandatory Aadhaar-seeding of all bank accounts—while this is the law today, it is not implemented rigorously—the taxman will have a 360-degree view of all potential taxpayers; and those that choose to say they do not have PAN numbers while buying high-value goods can be asked to quote Aadhaar numbers. Getting this is no small task and, till now, just a little over one crore of the nearly 25 crore PAN cards issued are linked with an Aadhaar number; and just about half the country’s bank accounts are Aadhaar-seeded even today. But once you have the right idea—and the finance minister appears to be on the right track here—the implementation is just a matter of time. There are valid concerns over privacy that, while UIDAI has assured have been taken care of, need to be encoded in the form of a privacy Bill—none of this, though, takes away from the need to use what looks like a fool-proof technology to try and tackle rampant tax evasion in the country.

 
 
 
 
 

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