Do You Need Aadhaar With Tax Returns Or Not? What Supreme Court Said

The government has argued that linking tax returns and filings to Aadhaar is essential to check tax evasion.


Aadhaar, PAN cards can be used for income tax returns and ITR filings.

New Delhi: 


  1. Those with Aadhaar must supply it with tax returns, says top court
  2. Over 1.1 billion Aadhaar IDs assigned already
  3. Privacy advocates, opposition had objected to making Aadhaar mandatory
Starting next month, an Aadhaar ID will have to be listed along with tax returns, the Supreme Court said, agreeing with a new law passed earlier this year. However, the top court cautioned that it is concerned with reports of Aadhaar data being leaked. The government has argued that linking tax returns to Aadhaar- a unique 12-digit ID assigned to every citizen and linked to iris scans and fingerprints- is essential to check tax evasion. 

"Our stand is vindicated," said Attorney General Mukul Rohatgi. Nearly 1.1 billion Indians have an Aadhaar ID. 

Judges today said that what they have upheld is the constitutionality of the new law. A separate case is deciding on whether making Aadhaar mandatory for tax returns and other processes violates a citizen's right to privacy. 

The law passed earlier this year makes it compulsory starting July for the quoting of an Aadhaar number when filing returns as well as when applying for a Permanent Account Number or PAN card, which is a tax code given to each individual. Judges today said that those already assigned an Aadhaar ID must use it for their returns and link it to their PAN card; others can proceed without it.

PAN allows for the tracking of all related monetary information of that entity. Quoting or producing a copy of your PAN card is compulsory in practically every major financial transaction including the purchase or sale of property, and is not restricted to Income Tax dealings.

Some opposition parties including the Left as well as privacy advocates have said that Aadhaar must remain a voluntary disclosure, but Finance Minister Arun Jaitley said that while people can use multiple PAN cards for tax evasion, Aadhaar, because of its biometrics, is harder to misuse.

Critics say that the Aadhaar system, which creates the world's largest database of biometrics - does not have enough checks against leaks and can also allow the government illicit and intrusive digital surveillance and profiling of individuals.

The Aadhaar database scheme, started in 2009, was set up to streamline payment of benefits and cut down on massive wastage and fraud. 

Last year, amid significant pushback from other parties, the government pushed through legislation that gives central government agencies access to the Aadhaar database in the interests of national security. Government officials said that the government had taken steps to ensure citizens' privacy would be respected and the authority to access data was exercised only in rare cases.

In its assessment of the measure, Delhi-based PRS Legislative Research said law enforcement agencies could use someone's Aadhaar number as a link across various datasets such as telephone and air travel records. 

That would allow them to recognise patterns of behaviour and detect potential illegal activities. 

But it could also lead to harassment of individuals who are identified incorrectly as potential security threats, PRS said. 

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