The government may soon make Aadhaar mandatory for buying shares and mutual funds, the Economic Times reported today. The move is aimed to tighten the loopholes that some unscrupulous investors exploit and make money by converting black income into white through the stock market.
The ET report says the government and market regulator Securities and Exchange Board of India or Sebi are planning to link Aadhaar to financial market transactions. Ever since the Modi government took over, it has taken several measure to stop tax evasion and black money conversion.
The government, under the Finance Act 2017, made it mandatory for taxpayers to quote Aadhaar or enrolment ID of Aadhaar application form for filing of income tax returns. It also made Aadhaar mandatory for applying for PAN card with effect from July 1, 2017.
However, the government still thinks that the PAN may not be enough to plug tax leakages in financial sector. A Sebi official spoke to the ET on the development and said: "We have been told that making Aadhaar compulsory is in the offing."
Earlier this year, the government also mandated that Aadhaar be linked to PAN card. Finance Minister Arun Jaitley said linking of taxpayer's permanent account number with biometric identifier Aadhaar was aimed at preventing tax evasion using multiple PANs. The Finance Minister called it an "effective anti-evasion measure" that will help the government to get rid of fake PAN cards and mismatch in income and expenditure.
Not only in financial markets, the government has also made Aadhaar a mandatory for farmers to get crop insurance policies. This year in March, the Agriculture Ministry made Aadhaar mandatory for availing crop insurance policies from the kharif sowing season. The Ministry issued a directive to rural financial institutes to comply with the new rule from the kharif (summer) season starting April 1.
"The Government of India has notified that farmers availing crop insurance schemes administered/implemented by the Department of Agriculture from kharif 2017 are hereby required to undergo Aadhaar authentication or furnish proof of possession of Aadhaar," the directive had stated.