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Govt to make Aadhaar mandatory for tax returns after July 1st 2017; Why they’re desperate

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How desperate is the government of India to get everyone under Aadhaar? What is this extreme urgency to force everyone to get an Aadhaar, while the case on the constitutionality of Aadhaar is yet to be determined by the Supreme Court? Why the sneaky tactics?

In a move that is in violation of the Supreme Court order of not making Aadhaar mandatory, the Union Government has introduced amendments to the Finance Bill 2017 at the last minute, making Aadhaar mandatory for filing taxes. The amendments state “Every person who is eligible for an Aadhaar number shall, on or after the 1st day of July 2017, quote Aadhaar number,
(i) in the application form for allotment of the permanent account number
(ii) in the return of income”

Failing the quoting of the Aadhaar number in the income tax filing, the government will have the right to cancel the users permanent account number (PAN). These amendments were not a part of the Union Budget announcement earlier this year, and were slipped in yesterday: the Finance Bill on the Indian Budget website, makes no mention of Aadhaar. The Finance Bill is being considered today for passing in the Lok Sabha.

Why make Aadhaar mandatory for tax returns?

What is the point of a PAN number then? There isn’t. What the government of India is trying to do is take multiple ID’s and combine them under a single identity number, so that all other historical ID’s become redundant. However, as is evident in this case, the PAN number isn’t going anywhere: it will still be required for tax filings, so Aadhaar is another layer of identification mechanism added on top of an existing one.

If the idea behind Aadhaar was to make give everyone an ID, why is it being forced on people who already have an ID for filing taxes?

An opinion piece in the Financial Express last month saw this coming, and links it to linking tax filing to information of money and transactions liked to bank accounts: while pointing out that “Of a total of over 24 crore PANs, the latest data indicate that only 97,33,664 have been linked to Aadhaar through e-returns”, it pointed out that an advantage of linking Aadhaar to PAN will “be a big source to gather banking transaction information, which can be an important indication of a person’s income profile.”

So, to put it simply:

Forcing digital transactions forces everyone to use accounts to make payments. Linkage of Aadhaar to bank accounts gives access to bank accounts. Linkage of Aadhaar to PAN number gives government ability to compare tax filings with bank accounts and payments.

An additional benefit is that the Income Tax department will be able to profile citizens according to their spending behavior, if it is allowed to do so, unless there are provisions in law preventing this. For that we’ll need a privacy law.

A few things

1. Violation of SC guidelines: This appears to be in violation of the Supreme Court ruling of not making Aadhaar mandatory for citizens for all but a few services, while the court determines the constitutionality of Aadhaar and whether privacy is a fundamental right or not. It’s worth noting that the Aadhaar act fails in terms of guaranteeing privacy, and allows for mass surveillance of citizens under the guise of “national security”, a term which is vague and undefined under law. Citizens have no recourse under the law, and Section 47 of the Act prescribes that only the UIDAI can file a criminal complaint for theft of data.

What is this but contempt of court, and the Supreme Court of India appears to be turning a blind eye to the governments violation of its order: are laws and orders only valid when the SC chooses to enforce them?

Why the hurry?

Here’s a guess: By the time the government is done with getting everyone on Aadhaar by making it mandatory, in violation of the SC order, the SC ruling will become redundant: Aadhaar will stay because it’s too big now to fail, and too much money, time, effort has been spent on piecing this together. Thus, pace is important for the government.

2. The issue of the single identifier and linked databases: Unlike the US Social Security Number (read this in Scroll.in), Aadhaar is being used as an identifier to link databases, which makes it easy for government officials to gain access to personal user information, such as bank records, education data, health records, and for surveillance of phone calls and data usage. Until Aadhaar, this data was not linked, but as we are aware, schools are now mandating Aadhaar numbers, Banks are pushing customers to get one, the SC has asked government to link Aadhaar to mobile numbers,

3. The BJP’s U turn on Aadhaar: Lest we forget, the PM Narendra Modi had publicly criticised Aadhaar when he wasn’t the PM:

Note that Aadhaar was missing from the BJP’s election manifesto. Now it appears to have become their main focus.

4. No privacy law in India: India doesn’t have an privacy law, and the attorney general, Mukul Rohatgi, has even argued in Supreme Court, saying that there is no fundamental right to privacy, saying, “Violation of privacy doesn’t mean anything because privacy is not a guaranteed right”


Someone needs to file a petition in the SC, seeking a stay of its operations, to at least pause this expansion of Aadhaar’s mandate in the absence of a SC ruling on it.

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  • Ajith Fredjeev Dinakarlal

    Glad to read a sensible article in the media after a long time that condemns the aadhar.
    As a pro-rights person The Ten Reasons Why I choose Not To Own the aadhar are:

    Under the Citizenship Rules of 2003 it is the Registrar General of India who has to maintain a National Register of Indian Citizens and issue National ID cards. (And not Infosys, Nilekani or his unwelcomed allied associates)
    The Parliamentary Standing Committee on the Aadhaar card has rejected the Aadhaar exercise. There is no legal sanction or budgetary sanction
    Aadhaar does not guarantee anything. It merely becomes yet another obstacle in obtaining services from the government. (Now a new excuse and comfortable justification for red-tapism in the government machinery)
    Enrolment agencies, sub-registrars, registrars and UIDAI have no legal liability for any theft, fraud, crime, and compromise of your security or privacy that may be perpetuated through Aadhaar
    The use of Aadhaar by various agencies will now expose all your IDs, information, properties, entitlements etc. to misuse in one go thus exposing you to unprecedented risk
    Money transfers from Aadhaar accounts will not be audited if there is less than Rs10 lakh transferred in a year. This means subsidy, bribes and black money may go to shell accounts that may never be traced!
    (Risk further multiplies when you get to know that…) Your money can be moved from Aadhaar-to-Aadhaar electronically without your knowledge
    You have neither control on who uses your Aadhaar nor any way to know or verify its use by anyone
    Your entire data and biometric is handled by non-Indian companies :)
    “In the meanwhile, no person should suffer for not getting the Aadhaar card in spite of the fact that some authority had issued a circular making it mandatory and when any person applies to get the Aadhaar Card voluntarily, it may be checked whether that person is entitled for it under the law and it should not be given to any illegal immigrant.” – Supreme Court Order in WP 494 of 2012 on September 23rd 2013

    • point

      U have quoted only supreme court .. me being honest tax payer can’t digest the fact that only 24 lakh people in this country earn more than 10 lakhs.

      Second issue is privacy or data theft… what can a person do with data theft… other than taking your money…. I don’t think money will move out of your account as it is covered wih layers in the bank aswell.

      Yes Aadhaar is an issue for people who lived on fraud… cheating and under reporting.. This 10lakhs etc per year is a joke.. Govt will use software to detect all transactions and computer will pick the people who are suspect.

      • Ajith Fredjeev Dinakarlal

        Would like to know:
        1. Is there a better quote to quote than what the supreme court quotes?
        2. You don’t think that money will not move out of one’s account. That is an opinion rather than a fact. Money transfers from Aadhaar accounts will not be audited if there is less than Rs10 lakh transferred in a year… that is a fact.
        3. As you say, “aadhar is an issue of the fraud” hahaha! so going by that logic, every aadhar holder is a saint.
        4. “Government will use software… blah, blah, blah…” Your entire data and biometric is handled by non-Indian companies :)

        Meanwhile, as a law-abiding citizen in a democratic set-up, I wish to respect the supreme court and the Registrar General and the Parliament Standing Committee and not fall for a cock and bull story by corporate propagandists. Is there anything wrong in that?

        And by the by, I pay my taxes and I don’t need cards to make me do that, just needed a bit of conscience. Sad that others require more.

        • point

          1.So you have fear that money will be stolen from aadhaar seeded account.
          2. Aadhhar will not be able to detect fraud if less than 10 lakhs
          3.This data is accessed by non indian companies

          … Your mobile to TV is bugged by NSA in US and GCHQ in UK.. even Merkels phone is bugged.. loosing money .—this is a far fetched Idea just for discussion. People can steal money even without aadhaar.

          already 50000 crores has been saved using aadhaar in various flagship programmes..

          U can keep arguing that everything is bad with no solutions.. But there is no alternative to this exercise to bring graft down.

          Problems come with all programs- at present Aadhaar seeding in PAN is having lot of issues – i am sure it will be rectified. There is no way that this govt will allow to cheat the country to the same extent as before. I am sure Aadhaar in Land records, Incometax , GST and Flagship programmes will create a fairer society by making the schemes reach eligible people.

        • Ajith Fredjeev Dinakarlal

          I wish I could rest my case with you speaking in support of the point I had raised. Yet for now, I agree to disagree with your earlier statement in support of the aadhar and reserve my comments.

  • Cityzen.co.in

    What can we do? Seriously.
    Is there somebody/entity that we can connect with in order to support the cause and not allow this abomination of citizen rights. We all know they are pushing it down our throats through schools, utility connections and what not, but is there any parallel world where we can stop the madness. I for one am still without an Aadhar card, and I would like to keep it that way, which anybody will agree is getting harder and harder.

  • Grimmjow

    Is Aadhar helping plug leakages?

    • Sagar

      Yes, In a big way. all the govt. subsidies are going into directly to the peoples account those who are needy. these people keep crying because they are worried about exposing their unaccounted black money.

      • mutta punda

        yep we are all anti nationals.

        • Sagar

          If you say so

        • mutta punda

          In deshbhakths point of view, anyone who is opposing them is an anti national. In that view, I am an anti national

        • Sagar

          why are you opposing? you don’t have the valid answer. that’s why you are making rubbish comments. I don’t know if you are anti-national or not, but you are a FOOL for sure.

        • mutta punda

          I am opposing bcoz aadhar has privacy issues and is not 100% fool proof. Hence I am against making it compulsory. I dont want to give my fingerprints and retinal scan to third parties who will misuse as technology grows. Already rampant misues are happening

  • Sagar

    We don’t have any problem with aadhar linkage, only tax evaders have the problem with aadhar. aadhar helps to bring transparency & to curb corruption. Many poors are already benefited from aadhar linkage. So stop crying.

  • point

    The author needs to think like an Indian citizen who wants to catch frauds than like some foreign joker who come to India to give sermons or quote texts from Supreme court. This Author should be educated that only 24 lakh people have declared Income more than 10 lakhs where Delhi alone may have 24 lakh people earning more than 10 lakhs…

    • Tharun

      Your point is true. Everyone should link their PAN card with aadhar card to file income tax returns. Here is an article you can check on how to link PAN with Aadhar.

  • Dhaval Dn

    no right to privacy is a big blunder of democracy