Aadhar by Unique Identification Authority of India – UIDAI, is a 12 digit number that serves as a unique identifier for Indian citizens and residents. It was introduced by the UPA government in 2010, with the intentions of making subsidy and benefits deliverance more effective and eliminates leakages in the process. Aadhaar has been ever prevalent in the news ever since.

No doubt, the decision of the Supreme Court on Aadhar card – a document of unique identification – is still pending, but the Centre government is making its best use by extending its field for linking it with any transaction by any individual.

In the last four months, two judgments have come from Supreme and both have given a jolt to the government. One, the government cannot make the Aadhar card mandatory for its welfare schemes. But it is almost necessary to make it mandatory in all such schemes. In another interim judgment of the court, it has been banned to link the Aadhar with PAN Card for the purpose of filing of income tax return. However, it has been made clear that with this decision, it will not have any impact on the constitutional provisions of amendment in the Income Tax law.

While it may be mandatory under 139AA (1) to enroll for Aadhaar and quote it in your tax return, there appear to be no consequences for non-compliance with that mandate for the moment.

The two-judge bench said the PAN cards of those people who are not Aadhaar card holders, and who do not comply with the provision of Section 139(2), cannot be “treated as invalid for the time being”.

In the recent notification, the government has made it mandatory to link Aadhar Card number for any transaction of Rs.50,000 or above.  At the same time, all the existing banks account holders will ensure to add Aadhar Card number by the end of the year.  Those who will not link the Aadhar card with their bank account, the same will be become inoperative after the target date.

The overall concept is that Aadhar card number will be necessary where earlier  the PAN number was necessary for any financial transaction.  The government has its own logic behind this that fake PAN cards are made available  and with the intention of evading tax, more than one PAN cards have been recovered from an individual person and as per estimate, around ten lakh cards have been cancelled.  Whereas on the other hand, with the availability of biometric data of an individual on the Aadhar Card, it has become difficult to go in for duplicate Aadhar Card.

Frankly speaking, the Aadhaar by Unique Identification Authority of India – UIDAI has consistently set new benchmarks in transparency and accountability by making public all its operations and decisions.

From transparency point of view, Aadhar is more transparent and accountable as a project of this magnitude has never been attempted before thereby rendering comparative analysis impossible.

In fact, there are many positives that a system like the Aadhar system will have for India, the limitations and flaws should also be kept in mind rather than a forced push for it. Aadhar does make managing benefits easier for India but making it mandatory to avail benefit makes the Aadhar database a prime target for exploitation, increasing the security risk behind it. Furthermore, forcing Aadhaar to be mandatory to file taxes opens up an argument on privacy rights. 

Both the Court and government should come up with a clear-cut notification, instead of making partial notifications from time to time, for making it mandatory for all purposes as in the biometric system, the chances of error are very remote.