Chapter of Identification, which contains credentials such as

Chapter 1


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1.1 Overview

As the topic suggests; linking Aadhaar card with Permanent Account Number (PAN) card and bank account leading to total financial inclusion is the topic chosen for the research purpose.

Aadhaar card is one of the most common form of Identification, which contains credentials such as date of birth, permanent residential address, fathers name, 12-digit Aadhaar number and most importantly, our biometrics. The card has finger print scans and iris scan of every cardholder. Aadhaar card was an initiative taken by the UPA led government. Aadhaar is only a proof of identity and not of citizenship. This ID will be helpful in availing government and non-government services in future.

On the other hand, Permanent Account Number (PAN) is a unique 10- letter code assigned by the income tax department. This number enables Income tax department to track monetary transaction via PAN.

The Idea behind linking Aadhaar card with PAN card and bank account is to capture everyone on a single platform. The department issuing Aadhaar cards is unique identification authority of India (UIDAI) and Income Tax department issues the PAN card. A collaboration of data between these 2 government led organisation would lead to a strong, transparent and unified data source for the government in the coming future. Post the biggest economic reforms in 2017, that is; demonetisation along with Goods and service tax (GST), the latest amendment made by the current government in power (BJP- Bhartiya Janata Party) is to link the Aadhaar card with Permanent Account Number. This will facilitate government to track each monetary transaction of the citizens and would eradicate the problems of multiple PANs in the name of same individual.

In order to link the Aadhaar card with the PAN, an individual needs to go to click on the tab ‘link Aadhaar’ on the left side of the window. The next step is to fill in our Aadhaar and PAN number; enter your name exactly s mentioned in Aadhaar. After submitting these details, unique identification authority of India (UIDAI) shall confirm the verification and later linking is confirmed.

If there is even a minor mismatch- for example, in your Aadhaar name – a onetime password (OTP) will be sent on your Aadhaar registered mobile number. All that the customer has to make sure is that the date of birth and gender in PAN and Aadhaar are the same. Then there is no need to even login or be registered on the e- filings website. However; if the Aadhaar name is completely different from your name in the PAN, then linking will fail and taxpayer will be prompted to change the name in either Aadhaar or PAN database. One cane make these corrections by going to (NSDL) National securities depository limited website or at UIDAI portal. If at all an individual has name mismatch while linking, one has to take immediate action because their might be another PAN card in the same individuals name used by some fake operators which is very risky. This amendment has good as well as bad repercussions. This might affect different classes of the society and the industry.


1.2 Purpose of Study.


When we talk about financial access, many times people can only relate it to the procurement of finance, which is not the only case. Financial access is a much broader term and hence should be related to financial inclusion. Financial inclusion may be defined as the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low-income groups at an affordable cost (The Committee on Financial Inclusion, Chairman: Dr. C. Rangarajan).

Financial inclusion broadens the resource base of the financial system by developing a culture of savings among large segment of rural population and plays its own role in the process of economic development. Further, by bringing low-income groups within the perimeter of formal banking sector; financial inclusion protects their financial wealth and other resources in exigent circumstances. Financial inclusion also mitigates the exploitation of vulnerable sections by the usurious moneylenders by facilitating easy access to formal credit.


1.3 Significance of study

The significance of the study is to measure the impact of the amendment in short, medium and long run. The amendment is made compulsory; if at all, somebody is not linking Aadhaar with PAN card before 31st march 2018, he/she cannot file tax returns. What makes this study even more important is to anticipate the repercussions of the amendment on different sections of the society. Linking Aadhaar with PAN and bank account will affect the ease of doing transaction, will ensure Direct benefit transfers (DBT), and might be very useful to provide social security benefits in the near future will make a unified platform for the government to track every individual of the nation, will help government to find out Benami Property (having disproportionate assets).

As we know that in Financial Year (FY) 2017, India faced two of the biggest Economic reforms, i.e. Demonetization and GST. Also during the 2nd quarter of 2017, the banks were made to enhance the Know your customer (KYC) by updating the 12-Digit Aadhaar number of the Account holders. This was done because Aadhaar card carries the biometrics of the Account holder and this will enable banks to reduce the documentation work for the customers for any financial service.

The crux of this study is to find and anticipate the impact of the linking process. This is because amendments look great on papers however; things turn out to be quite different when it comes to practical implication of the same. Just like things must have been looking great on papers when the current government decided to demonetize 500 and 1000 rupee notes from circulation in order to eradicate the problem of black money and parallel economy. However when it was practically implied on the economy, we saw a huge liquidity crunch in the following quarter. ATM’s were not funded with cash, new currency cassettes were not replaced in the ATM. Withdrawal limits were changed every week. Small, micro and medium business suffered the most, because most of the transactions were made in cash, property transactions came to a standstill. Coming to the primary sector, our farmers who did not had any bank account had to declare the source of income as most of the savings were in cash?




Chapter 2-

 Literature Review

The latest amendment, which has to be done before 31 March 2018, associates both pros and cons for the economy. Firstly, let us give light on the process of digitization and e-governance. Aadhaar project is one of the significant projects in India to bring the universal trend of digital innovation. The launch of this project was focused on the inter-operability of various e-governance functionalities to ensure the optimal utilization of Information, Communication and Technology Infrastructure. Towards this Government of India has recently made Aadhaar card mandatory for many government applications, and has promoted Aadhaar enabled transactions UIDAI came into existence under the UPA government, and Nandan Nilekani, co-founder of Infosys was appointed as the chairman of the Aadhaar Project. Aadhaar card contains the demographic features such as name of the citizen, Father/Mother’s name, Date of Birth, Sex, address of the citizen, and biometric features such as photograph, fingerprints and iris (eye) details.  The demographic features as well as in the form of Quick Response (QR) code along with a 12-digit unique identity number called, Aadhaar, are printed on the card issued to every citizen. All the demographic and biometric data are stored into one centralized database and Forbes 1 and The Times of India 2 have reported this project as a world’s largest database management and Biometric ID system respectively. The UIDAI project provides the online support to change the demographic data of Aadhaar Card using SSUP (Self Service Update Portal) from UIDAI official website ( For an instance to change the name, one needs to submit the Gazette Notification of India mentioning that ‘required person’s name has been changed from old name to new name’. To update DOB (Date of Birth), the required documents are Birth Certificate issued by the District Municipal Corporation, and for the people who do not have a birth certificate and were born before 1989, they can provide an affidavit to change their DOB. (Raja Siddharth Raju, 2017)

Since Aadhaar and Pan Linkage amendment is bound to affect many sectors in the     economy, hence I had to narrow down my research towards the following three variables-

a.       Property transactions

b.      Ease of doing transactions

c.       Social Security Benefits

India’s driven biometric character records venture, Aadhaar, was depicted as one that would improve India’s welfare endeavors by advancing incorporation and decreasing defilement. From being a willful ID, it has progressed toward becoming true necessary for most welfare programs. In spite of early notices of its constrained part in accomplishing its expressed goals, progressive governments have increase its utilization. Utilizing an assortment of sources, an audit of the effect of Aadhaar on welfare programs is exhibited. It is discovered that a long way from being comprehensive and decreasing defilement, Aadhaar is turning into an apparatus of rejection. The administration’s evaluations of investment funds additionally do not confront examination, and whatever is named as reserve funds is frequently the aftereffect of a foreswearing of lawful qualifications. In its present frame, the Aadhaar venture undermines the privilege to life. (Khera, DECEMBER 16, 2017 )

Coming back to the property transactions. The unique identification project presents an opportunity to find the benamidar effectively. Providing the unique identity number and necessary document should be made compulsory for buying the property. The necessary document includes Aadhaar card, pan card, land survey number and bank account details should be provided while purchasing any kind of properties. The detail of the person is being collected and stored in the database. On buying of property the details of the person who buys the property is being checked with the details of the documents whether the person buys the properties in his own name or someone else name. The property details should be linked in the Aadhaar card, which is made compulsory by the government makes the Income Tax Authorities to find the Benamidar easily. This helps in avoiding the black money and make people to show off the immovable properties in account. In our proposed system, we store the details of all persons in database where database is not sufficient for storing the large number of datasets so we use big data for storing the huge datasets. By storing these data’s, we are able to generate a family tree of a person with their details in order to find the Benamidar. With the help of family tree and the details of each person in the family tree, the Authorities will find whether the purchaser can able to buy the property according to the payable Income Tax norms. For mapping the details of the persons in the family tree, we use Iteratively Reweighted Least Squares (IRLS) algorithm to perform tree-pruning process. This algorithm is efficient for finding the Benamidar.

The properties are by and large obtained for the immediate or backhanded advantage of a man paying cash for the buy. The properties acquired on invented name. The proprietor of property is missing or not traceable. The property proprietor does not think about the exchange. The cash is paid from dark cash and PAN card number is not given. Incase if recipient and proprietor of a property are not same. The counter debasement technique go for measures, which make it troublesome for the degenerate to spend or contribute the evil gotten riches. The greater part of the riches in India are get put resources into Benami immoveable property, gold and goldsmiths, high esteem merchandise and different obvious utilization. The Benami Transactions (Prohibition) Act, 1988 (Benami Act) disallows Benami exchanges and furthermore it accommodates government securing of the property held Benami. Usage of the Benami Transaction Act should be made more powerful. There is some exclusion for the Benami properties. This exclusion includes –If the property is purchased in the name of wife or unmarried daughter, it is not Benami property. If wife or any other relatives with known fund hold a property, it is excluded from

Benami properties. In case of Hindu Undivided Family (HUF), if head of Karta decide to buy a property for the benefits of all trustees. Religious or charitable properties are excluded. How Benami Property will be identified? In order to identify Benami properties, authorities consider following factors. Authorities will look at the source of fund for purchasing the property. Tax on the fund is paid or not. If the property is purchased on someone’s name what is the purpose behind buying the property. The authority will find out who is holding a document of the property. If the property is bought, the authority will check whether the tax is paid for the property or not. The authority will also check that actual possession of the property is with whom. (Sonia Jenifer Rayen, 3 March 2017)

Coming to the ease of doing transaction because of linking Aadhaar card with bank account. Aadhaar – a Unique Identification number (UID) has undoubtedly re- modeled the way India functions. In merely 6 and half years, since the time of its conception, 1.11 billion people in India have Aadhaar, in a total population of 1.25 billion. True to its literal meaning in Hindi, Aadhaar is a strong foundation on which India can thrive and grow. It’s a strategic and reliable tool used to increase the outreach of Government schemes, services and benefits, so the people who are truly in need could profit from them.

Pay impose: People can confirm their documented returns through some basic on the web. It eliminates the documentation needs. This mode is more financially well informed and productive to Furnish Income Tax Return utilizing Aadhaar OTP confirmation choice.


Beating the international ID blues: To get another identification in only 10 days Aadhaar Card enables when we to go online to apply for a travel permit, join a duplicate of your Aadhaar Card. This will fill in as a proof of character and address. After three days, you will get an arrangement. From there on, the Passport Office will process and dispatch your international ID in only seven days.

Open ledgers in a blaze: There is no compelling reason to gather numerous personality confirmations or circled for documentation. Just Aadhaar Card is adequate evidence of your character and address.

To get annuity cash on time: The Aadhaar Card is a gift for senior residents. Overall, more seasoned individuals may discover documentation forms bulky and tedious. Retired people simply need to enlist their Aadhaar Card number. This will guarantee pay.

Advanced life endorsement: Pensioners are motivated to be upbeat, because of the Aadhaar Card. You can utilize your Aadhaar Card enlistment number online to get an advanced life testament. This can help you to keep getting your benefits without the issue of physically setting off to the bank and presenting the life endorsement.

Simple provident reserve dispensing: The Aadhaar Card guarantees that the Provident Fund is dispensed specifically to the retired person’s record. The retired person should essentially connect the Card with their benefits account. This spares time and exertion.

LPG and different endowments: We can get the LPG sponsorship in your financial balance. You should simply outfit your Aadhaar Unique Identification Number (UIN). Truth be told, all legislature related sponsorships will contact you specifically because of your Aadhaar Card. No compelling reason to enroll independently for each administration advantage. An expansive extent of the populace in India is associated with difficult work, which may prompt change in fingerprints. Additionally, there may be mistakes in information recording and information arrangement. In the event that a man’s data is wrongly recorded, there must be some system to rectify it. In any case, seeing the adaptability of this venture and in addition time constraints (improve in need lattice), it winds up plainly hard to take every one of the grievances about information redress. Biometric measures may have duplication system yet they were not tried legitimately. There were a few inquiries raised on different media stages over the confirmation of all the Aadhaar cardholders Biometric Technology Today. It is additionally a testing errand to store, screen and control information of more than a billion people. (Janani, 22 November 2017)