Difference Between Aadhaar and PAN Card

difference aadhaar pan

It is easy to see why a lot of folks are confused about PAN Card and Aadhaar Card. Both are typically used to establish the identity of the one bearing the card. However, you might be surprised to learn that this is just about the only similarity the two cards have with respect to each other. So what are the differences between an Aadhaar Card and a PAN Card?

The PAN Card

First of all, the PAN Card is the physical representation of an individual’s Permanent Account Number which is supplied by the Income Tax Department of the Indian government. While PAN Cards can be used to establish the identity of the cardholder, it should be understood that this is not inherently its principal function. The main purpose of the PAN Card is to track a taxpayer’s financial transactions especially those related to the payment of income and other mandatory taxes.

This being said, the PAN Card is a mandatory requirement for everyone in India if ever they will be engaging in certain types of financial, business, and investment transactions. As such it applies not only to Indian nationals and residents but is also applicable to foreigners and foreign entities that are conducting business or investing substantially in the country. The PAN is one of the essential requisites to starting a company in India. Even depositing a certain amount of money, usually greater than Rs 50,000, will require you to have your PAN ready. The point is that the main purpose of PAN is to make sure that taxes are paid judiciously and appropriately.

The issuance of a PAN requires the collection of the assessee’s name, father’s name, date of birth, complete address, and signature. It is typically composed of 10 alphanumeric characters.

The Aadhaar Card

If the main purpose of the PAN Card is to identify all transactions that are financial in nature and to help prevent tax evasion, the principal goal of an Aadhaar card is to serve as a national identification tool for Indian nationals primarily for the provision of specific welfare services such as food and water rations as well as fuel subsidies and the like.

The Aadhaar is only open to Indian nationals and provides a very unique identification number issued by a central government office, the Unique Identification Authority of India. It’s more like the national ID system in other countries where biometric information is collected in addition to the usual identification parameters. Technically, any Indian national can apply for an Aadhaar but this is not mandatory. As a matter of fact, the Indian government has reiterated its stance on the status of Aadhaar being a strictly-voluntary card system. The Aadhaar Card also contains 12 numbers instead of a 10-digit alphanumeric scheme.

The Bottom Line

It is easy to differentiate the Aadhar Card from the PAN Card. The former is voluntary and is primarily indicated as a national ID system, allowing Indian nationals to receive certain welfare services. The latter is more directed towards ensuring tax efficiency. As such everyone – locals and foreigners alike – is expected to have a PAN Card.

If you wish to conduct a wide range of financial transactions in India, it is advisable you apply for a PAN card online.