According to the financial daily, the government and the Securities and Exchange Board of India (Sebi) are planning to link financial market transactions to Aadhaar
after, according to two sources cited by the report, the former came to realise that the permanent account number (PAN) might not be sufficient in putting an end to tax evasion.
"We have been told that making Aadhaar
compulsory is in the offing," a top official with a financial services firm told the financial daily.
However, according to a CEO of a brokerage firm, who spoke to the financial daily on the condition of anonymity, the move could unsettle some "regional players" who could see a "dip in activity even in IPO market". However, the source said this dip would be temporary. According to the unnamed CEO, these players would be worried over how many clients would remain once Aadhaar
is made mandatory.
According to the report, when such a compulsory linking will come into effect is unclear. Further, it is not known yet whether the Aadhaar
will serve as the sole identification number for financial market transactions, thereby replacing the PAN.
Brokers who spoke to the financial daily said that PAN
has not been able to prevent people from using the stock market
for money laundering. They said that multiple PANs and fake demat accounts were being used to bring in black money
into the stock market.
comes after the government, as reported earlier
, deleted or de-activated more than one million PANs in a move to check fake identities. Reportedly, as on July 27, 11,44,211 duplicate PANS have been identified, said the Indian Express
has quickly proliferated into various areas as the government's preferred form of identification.
As reported earlier
, Finance Minister Arun Jaitley, through an amendment to tax proposals in the Finance Bill for 2017-18, had made linking Aadhaar
mandatory for filing income tax returns.
The revenue department has said that "every person who has been allotted PAN
as on July 1, 2017, and who in accordance with the provisions of sub-section (2) of section 139AA is required to intimate his Aadhaar
number, shall intimate his Aadhaar
number to the principal director-general of income tax (systems), or DGIT (systems)".
Also, the government had in October last year made the unique identification number mandatory for everyone
to get LPG subsidies. In March this year, it was extended for free cooking gas connections to women of BPL households.