In the Finance Bill passed on Wednesday, the government had inserted an amendment making Aadhaar mandatory for filing income tax returns.

As per the amendment, “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”.

As per the controversial Finance Bill that the Lok Sabha passed on Wednesday, Aadhaar Card will be mandatory for the application of PAN Card in the future. In fact, a few source-based reports have suggested that those PAN Cards that are not linked to Aadhaar will become invalid from next year.

Earlier on Wednesday, the Finance Minister had hinted that the Aadhaar card may replace PAN card in the future. “A stage may come when unique identity card (Aadhaar) may become the sole card. There are many countries where such a situation exists. There is a social security number in America and in India it (Aadhaar) could be the counterpart,” Arun Jaitley had said.

Finance minister Arun Jailtey had rejected all demands for a relook insisting that the step was necessary to curb tax evasion and frauds as people have multiple PAN cards and are using it as a tool for not pay taxes.

“Aadhaar has biometric details, so its chances of misuse become minimal. When the country has so much technology, and when it is being put to use, then why create such a hue and cry about it? It is an anti-evasion measure which will benefit the country. So the government considers it right to implement it,” he said.

The concerns about the Aadhaar Card was, it developed for targeted delivery of subsidies and services to individuals in India by assigning them unique identity numbers. But, with the government linking it to most services, it cannot be called voluntary anymore. This also makes it seem the government is violating the Supreme Court order dated August 11, 2015 which prevents making Aadhaar mandatory.

“Aadhaar is a more foolproof identity of a citizen as it cannot be duplicated and this will help in addressing graft and though the move will ensure transparency in filing of income tax returns but at the same time, this can also help in tracing money launderers,” said a senior government official.

With Aadhaar card connected to the PAN card, and effectively with bank accounts, the government will be now able to track the income and expenditures of millions of Indians each time there is a transaction that involves a bank account.