The new rule, part of the Finance Bill that was cleared by the Lok Sabha after Mr Jaitley's response on Tuesday, will kick in from 1 July. From this date, the government will treat any PAN card that has not been linked to an Aadhaar number invalid. Income tax returns too would not be accepted without the identification number backed by biometrics such as fingerprints and Iris scans stored in a central database.
Mr Jaitley said the bill put up for parliamentary approval introduced these provisions to weed out duplicate PAN numbers and reduce the scope for tax evasion. The minister said the government had detected instances where some people had even five PAN cards.
This law also introduces a cap on cash transactions of more than Rs 2 lakh, down from the Rs 3 lakh that the minister had suggested earlier. The limit was introduced to curb generation of black money, the minister said.
The Modi government had pitched the Aadhaar law passed by parliament last year to plug leakages in delivery of subsidies and government services. It was aimed at circumventing a Supreme Court directive that allowed the government to require people to submit their Aadhaar numbers for a handful of services such as gas subsidy. Last year's law, however, gave the government a free hand.
Biju Janata Dal lawmaker Bhartruhari Mahtab protested, reminding the minister about the top court's verdict. Mr Jaitley sidestepped the reference to the court, focussing instead on how people wouldn't really be inconvenienced due to the requirement since 98 per cent of adults already had an Aadhaar number. And the few who didn't, could always apply.