Difference Between Aadhaar Card And Pan Card: What You Need To Know

By Author: Akhil Sharma
Total Articles: 2
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In India, Two vital identity documents are utilized to determine the legal, financial, and other issues of the government like the Aadhaar Card and also in the case of the Permanent Account Number (PAN) Card. Both are distinct identity cards issued by the government. But, both have distinct roles and perform different functions. Learning the differentiators between the two cards Aadhaar Card and PAN Card is vital for each Indian citizen since it assists in making sure that you're paying tax laws, using services that officials from the government provide, and protecting your private data.

In this post, we'll examine the major differences between the Aadhaar Card as well as the PAN Card. We will also highlight the significance of each, the use they have as well as their significance in various scenarios.

1. Purpose and Functionality

Aadhaar Card:
It's called an Aadhaar Card is an identity number provided by UIDAI It is the Unique Identification Authority of India (UIDAI). It is used to prove identity and also ...
... the addresses of Indian citizens. It is also linked to the national database of importance. It's a 12-digit number that is provided to everyone who is a holder of biometric data such as fingerprints, iris, or iris along with the specifics of their dietary information. The Aadhaar Card is most commonly utilized to pay for welfare and social programs in addition to other forms of assistance like pensions or LPG in addition to many other advantages. It can also serve as the main account to use for banking or registering tax offices, as well as linking mobile numbers.

PAN Card:
Permanent Account Number (PAN) is issued by the Income Tax Department of India It's a unique alphanumeric 10-digit number. The primary reason for a PAN card is to record transactions performed by an individual, and also to prevent tax avoidance. The requirement to file taxes for income (ITR) and to report the cash transaction that is over the threshold specified, in addition to investing in the market for mutual funds as well as the stock exchange as well as other money. PAN Card is primarily used for accounting and taxation.

2. Issuing Authorities

Aadhaar Card:
The Aadhaar card was issued by UIDAI, Unique Identification Authority of India (UIDAI) which is a division of the Ministry of Electronics and Information Technology (MeitY). UIDAI is responsible for enrolling in the process of collecting information and the issue of Aadhaar numbers to all residents of India.

PAN Card:
It can be described as the PAN Card which is issued from the Income Tax Department of India. The applications for PAN are processed by authorized agents, or on web-based sites like NSDL (National Securities Depository Limited) or UTIITSL (UTI Infrastructure Technology and Services Limited).

3. Data Collected and Method of Issuance

Aadhaar Card:
Aadhaar registration is the collection of biometric data (fingerprints and scans of the eye) together with details of the demographics (name and address, and date of birth, ). The service is accessible to all residents of India regardless of the identity they have and does not limit Indian citizens.

PAN Card:
PAN registrations are determined by the basic information about the private information that you give like name and addresses, birth dates, along with photographs. This process doesn't need biometrics. The process is typically restricted to Indian companies or individuals. Non-Indians as well as non-residents may be able to request the PAN in certain circumstances, particularly for tax-related reasons.

4. Usage and Applications

Aadhaar Card:
The Aadhaar Card is now an identity card that can be used for various purposes. It can be utilized for:
Social welfare programs are government-sponsored in the form of ration cards, LPG, or the distribution system of the government (PDS).
Banking Aadhaar allows users to open bank accounts, and carry out KYC (Know Your Customer) procedures, in addition to accessing banks' services.

Aadhaar with mobile phone numbers to verify the identity of the person and to ensure security.

Income tax return Aadhaar is usually needed for filing income tax returns however PAN remains the most widely employed tool for tax-related matters.

E-KYC can be described as an internet-based KYC (Know Your Customer) process that is utilized in a variety of industries, such as telecom, banking, and insurance.

PAN Card:
The PAN Card is typically utilized to perform the tax and financial aspects of transactions including:

Income tax (ITR): The filing of taxes is required to be paid on the PAN no matter if or not a worker is self-employed or not.
Tax deductions at origin (TDS): A PAN is needed for TDS deductions, as well as for the purpose of obtaining refunds for tax overpayments that need to be made.

Financial PANs for Transactions are necessary for conducting massive financial transactions, such as purchasing or selling a house or opening bank accounts such as purchasing mutual funds or trading stock.
Registration of Businesses: PAN registration is required for companies as well as other organizations that wish to be registered with the Income Tax Department and conduct diverse commercial activities.

5. Legal and Compliance Aspects

Aadhaar Card:
Aadhaar is increasingly employed for a variety of purposes in addition to the verification of identity. But, it is controlled by the Aadhaar Act (2016). The Aadhaar Act (2016) governs the data it collects as well as its storage and utilization. In recent years, Aadhaar has seen a rise in usage, and also its use is increasing. Supreme Court of India has established guidelines to limit the usage of Aadhaar only to certain areas such as welfare programs, and connecting it with PAN for the taxation process.

PAN Card:
PANs are required as per the Income Tax Act, of 1961 and the failure to obtain or utilize PANs to file tax returns could lead to fines and sanctions. PAN is vital for filing tax returns on income. Companies as well as individuals who don't have a PAN cannot complete certain financial transactions including opening bank accounts or applying for loans.

6. Interlinking of Aadhaar and PAN

One of the most significant developments over the last few years has been the requirement to link Aadhaar to PAN for each taxpayer across India. The government has made the linking mandatory as a part of the steps taken to stop tax evasion and enhance Transparency. It is crucial to file taxes on earnings and gain access to government programs.
Aadhaar PAN connection is not obligatory for people who don't require tax payments, however, it is required for people who are required to file tax returns on be filed or have transactions that require high value.

7. Key Differences Between Aadhaar and PAN

Feature
Aadhaar Card
PAN Card
Issuing Authority
UIDAI (Unique Identification Authority)
Income Tax Department
Purpose
ID proof as well as address
The identifier of a report for taxpayer and financial
Data Collected
Biometric (fingerprints and scans of the Iris) and Demographic
Personal details (name and birth date Address)
Usage
Accounts with banks' mobile numbers as well as welfare schemes, e-KYC and e-KYC.
TDS financial transactions
Legal Framework
Aadhaar Act (2016)
Income Tax Act (1961)
Linkage Requirement
On most occasions, it's not necessary however some applications require it like mobile phones, banks, and mobile phones.
The tax filing process is necessary to file income tax as well as for financial transactions
Target Audience
Indian residents
Indian residents entities, foreigners, and individuals that can be used for taxes

Conclusion

Both the Aadhaar Card as well as PAN Card are important documents needed to be used in India and serve different functions. It is the Aadhaar Card that serves as verification of residence and provides access to various public benefits and services as well as the PAN Card that plays a vital role in addressing tax issues and transactions.

Being aware of their different functions can help ensure that people adhere to the regulations of the regulatory agencies as well as benefit from a less complex administration procedure. As an example, with regards to making tax returns as well as opening bank accounts, or accessing welfare programs as well, both Aadhaar as well as PAN are vital to be able to compete in today's Indian market.

I'm Akhil Sharma, a dedicated digital marketer at Surepass Technologies Pvt. Ltd., A leading company that provides verification solutions such as background verification. With a passion for leveraging technology to streamline processes and enhance security, I specialize in crafting innovative digital marketing strategies tailored to meet the dynamic needs of clients.