INDIA – Supreme Court Rules Aadhaar Scheme Legal
On 26 September 2018, the Supreme Court of India upheld the constitutional validity of the Aadhaar scheme, while also striking down several contentious provisions of the Aadhaar Act.
Aadhaar is a 12-digit unique identification number issued on a card by the Indian government to every individual resident of India.
Banks, Mobile Phones and Schools
Importantly, the Supreme Court made it clear that an Aadhaar number cannot be required for opening bank or mobile phone accounts, or for school admissions. Likewise, the court ruled that Aadhaar data cannot be shared on the grounds of national security.
PAN number and Tax
The Supreme Court upheld the provision of the 2017 Finance Act making it mandatory to quote an Aadhaar number to apply for or renew a PAN (Permanent Account Number).
Earlier this year, the Central Board of Direct Taxes (CBDT) extended, for the fifth time, the deadline for residents to link their Aadhaar numbers to their Permanent Account Number (PAN) until 31 March 2019, to allow the Supreme Court time to reach its judgement.
On 11 May 2017, the Indian Ministry of Finance issued a notification exempting certain taxpayers, including foreign nationals, from the 2017 Finance Act requirement to submit an Aadhaar number when filing income tax returns (ITR).
Action Items
- Foreign nationals resident in India are advised to obtain an Aadhaar number and to link it to their PAN before the eventual deadline.
