The Government of India has made it mandatory for investors to provide their Aadhaar and PAN details for investing in small savings schemes such as Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), National Savings Certificate (NSC), and others. The move was made to promote transparency in investments, prevent tax evasion, and curb money laundering.
What is Aadhaar?
Aadhaar is a 12-digit unique identification number that is issued by the Unique Identification Authority of India (UIDAI). It serves as a proof of identity and address for Indian residents.
What is PAN?
Permanent Account Number (PAN) is a 10-digit alphanumeric code issued by the Income Tax Department of India. It is used to track an individual’s tax payments and acts as a proof of identity.
Why is Aadhaar and PAN Mandatory for Investing in Small Savings Schemes?
Here are the reasons why the government has made it mandatory for investors to provide their Aadhaar and PAN details when investing in small savings schemes:
To Promote Transparency in Investments
By providing their Aadhaar and PAN details, investors can easily track their investments and the returns earned from them. This promotes transparency in investments and ensures that investors are aware of the returns they’re earning from their investments.
To Prevent Tax Evasion
Aadhaar and PAN details are used to track an individual’s financial transactions and income. This helps the government to identify any discrepancies or anomalies in the income earned and taxes paid by individuals. By making it mandatory for investors to provide their Aadhaar and PAN details, the government aims to prevent tax evasion.
To Curb Money Laundering
Aadhaar and PAN details are also used to track an individual’s financial transactions and income. This helps the government to identify any suspicious transactions that may be related to money laundering. By making it mandatory for investors to provide their Aadhaar and PAN details, the government aims to curb money laundering.
How to Link Aadhaar and PAN for Investing in Small Savings Schemes?
Investors can easily link their Aadhaar and PAN details by following the simple steps mentioned below:
- Visit the Income Tax Department’s e-filing website.
- Click on the ‘Link Aadhaar’ option.
- Enter your PAN, Aadhaar number, and name as mentioned in the Aadhaar card.
- Enter the captcha code and click on the ‘Link Aadhaar’ button.
- Your PAN and Aadhaar will be linked.
It is important to note that providing Aadhaar and PAN details is a legal requirement when investing in small savings schemes. Therefore, investors should link their Aadhaar and PAN details before making any investments.
