Quick answer: The “Aadhaar Bill” became the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, which gave Aadhaar a legal basis and was passed as a Money Bill in March 2016. In September 2018 the Supreme Court upheld the Act for welfare schemes and income tax but struck down several parts, and the 2019 amendment rewrote the law so that Aadhaar is voluntary for most private uses. Today Aadhaar can be required for government subsidies and for PAN and tax returns, but not for things like bank accounts, SIM cards or school admissions.
What the Aadhaar Bill was
Before 2016, Aadhaar ran under a government notification, without a specific law behind it. The Aadhaar Bill, 2016 was introduced to give the scheme a statutory footing. Its stated purpose was to target the delivery of subsidies, benefits and services by giving every resident a unique identity number.
How the Bill was passed
- 3 March 2016: the Bill was introduced in the Lok Sabha by the then Finance Minister, Arun Jaitley, and certified as a Money Bill.
- 11 March 2016: the Lok Sabha passed it.
- 16 March 2016: the Rajya Sabha returned it with recommended amendments. Because a Money Bill does not need the Rajya Sabha’s agreement, the Lok Sabha rejected the recommendations the same day and passed the Bill in its original form.
- 25–26 March 2016: the President gave assent, and the Act was published in the Gazette of India.
The Money Bill route was controversial because it limited the Rajya Sabha’s role, and it was challenged in the Supreme Court.
Key features of the 2016 Act
- Who can enrol: every resident of India, meaning a person who has lived in India for at least 182 days in the 12 months before applying. The rule for Non-Resident Indians (NRIs) with Indian passports was relaxed in 2019, as explained below.
- What is collected: demographic information (name, date of birth, address) and biometric information (photograph, fingerprints and iris scans).
- Use for subsidies (Section 7): the government can require Aadhaar authentication for subsidies, benefits and services paid from the Consolidated Fund of India. Until a person gets Aadhaar, they must be offered another way to prove identity.
- Not proof of citizenship: the Act states that Aadhaar does not confer citizenship or domicile.
- Protection of biometrics: core biometric information (fingerprints and iris) cannot be shared with anyone and can be used only for Aadhaar enrolment and authentication.
- Authentication answers: UIDAI responds to an authentication request with a yes or no, or with e-KYC data where permitted. It does not share biometrics.
An earlier version of this article said you “submit” biometrics as documents to get an “Aadhaar card bill”. That was a mix-up of terms: the Bill was the law, and the biometrics are captured by the operator at an enrolment centre. It also listed government savings estimates (₹50,000 crore a year, ₹10,000 crore on LPG, 600 million hours saved). We could not trace these figures to a current official source, so we have removed them.
Offences and penalties in 2016
The original article said unauthorised access to the Aadhaar database could lead to up to three years in jail and a minimum fine of ₹10 lakh. That was correct in 2016. The 2019 amendment raised the maximum jail term to 10 years; the minimum fine of ₹10 lakh is unchanged.
The Supreme Court judgment of 26 September 2018
In Justice K.S. Puttaswamy (Retd.) v. Union of India, a five-judge bench decided the Aadhaar challenges by a 4:1 majority. Justice D.Y. Chandrachud dissented and would have struck down the whole Act.
What the court upheld
- The Aadhaar Act itself, including its passage as a Money Bill.
- Mandatory Aadhaar for subsidies, benefits and services under Section 7.
- Mandatory linking of Aadhaar with PAN and quoting Aadhaar in income tax returns (Section 139AA of the Income-tax Act).
What the court struck down or limited
- Section 57, which had let private companies use Aadhaar for authentication on the basis of a contract.
- Mandatory linking of Aadhaar with bank accounts (under money-laundering rules) and with mobile SIM cards.
- The national-security disclosure provision (Section 33(2)) in its original form.
- The rule that only UIDAI could file a complaint about offences (Section 47).
- Retention of authentication records for five years; the court said they should not be kept beyond six months.
- The court also said children cannot be denied scheme benefits for lack of Aadhaar.
The Aadhaar and Other Laws (Amendment) Act, 2019
Parliament amended the law to bring it in line with the judgment. The amendment replaced an ordinance from March 2019, was passed by both Houses in July 2019 and came into force on 24 July 2019. Its main changes:
- Voluntary use: you may use Aadhaar voluntarily, by authentication or offline verification. Authentication can be made mandatory for a service only by a law made by Parliament.
- Banks and telecom: banks may verify customers through Aadhaar authentication, offline verification, a passport or another officially valid document, and the customer chooses. No one can be denied service for not having Aadhaar, and telecom companies cannot store the Aadhaar number or core biometrics.
- Offline verification: identity can be checked without contacting UIDAI’s database, for example by scanning the secure QR code or using the offline e-KYC file. Entities doing this must take consent and cannot collect or store the Aadhaar number or biometrics.
- Virtual ID: the law now recognises an alternative virtual identity in place of the actual Aadhaar number.
- Children: a parent’s or guardian’s consent is needed to enrol a child, and a child can apply to cancel their Aadhaar within six months of turning 18.
- Civil penalties: UIDAI can bring proceedings against entities that break the rules, and an adjudicating officer can impose penalties of up to ₹1 crore per contravention.
- Section 57 deleted and a separate UIDAI Fund created for the authority’s fees and grants.
The same 2019 Act also removed the 182-day stay requirement for NRIs holding a valid Indian passport.
The legal position today
| Use | Can Aadhaar be made compulsory? |
|---|---|
| Government subsidies and benefits under Section 7 | Yes, but an alternative means of identification must be offered until you get Aadhaar or if authentication fails |
| PAN allotment, PAN linking and income tax returns | Yes, under Section 139AA, with some exempt categories |
| Bank account KYC | No. Aadhaar is one voluntary option |
| Mobile SIM KYC | No. Aadhaar e-KYC is one option; check current telecom identification rules |
| Driving licence | No. See our guide on Aadhaar and the driving licence |
| Private services such as e-commerce or travel | Only voluntary use, and only by entities approved under the rules |
Two later changes are worth knowing. In January 2025 the Ministry of Electronics and Information Technology (MeitY) notified amendments to the Aadhaar Authentication for Good Governance Rules, which allow approved non-government entities to offer voluntary Aadhaar authentication for specified public-interest purposes. Mobile identification is now governed by the Telecommunications Act, 2023 and the Telecommunications (User Identification) Rules, 2026, which provide an Aadhaar e-KYC route and a separate digital KYC route for people who do not use Aadhaar.
For a practical list of what you must and need not link, see our overview of linking Aadhaar with other documents. For how e-KYC works under these rules, see our Aadhaar e-KYC explainer.
Frequently asked questions
Is the Aadhaar Act still valid?
Yes. The Supreme Court upheld the Act in 2018 after striking down some provisions, and Parliament amended it in 2019. The amended Act is the law today.
Is Aadhaar a proof of citizenship?
No. The Aadhaar Act says the number does not confer any right of citizenship or domicile. Foreign nationals who live in India for the required period can also get Aadhaar.
Can a bank refuse to open my account without Aadhaar?
No. Since the 2019 amendment, Aadhaar is one of several ways to complete bank KYC, and a bank cannot deny service only because you do not have Aadhaar. Aadhaar can be needed if you want a government benefit credited through Direct Benefit Transfer.
Why was the Aadhaar Bill passed as a Money Bill?
The government argued that the Bill was mainly about spending from the Consolidated Fund of India on subsidies. The Supreme Court’s majority accepted this in 2018, while Justice Chandrachud’s dissent held that the certification was improper.
Can I cancel my Aadhaar?
The 2019 amendment gives a cancellation option only to people who were enrolled as children: they may apply to cancel their Aadhaar within six months of turning 18. The Act does not give other adults a similar general option.
This guide was checked in October 2026 against the Aadhaar Act, 2016, the Aadhaar and Other Laws (Amendment) Act, 2019 as published in the Gazette of India, PRS Legislative Research’s bill summaries, and the Supreme Court’s 2018 judgment. This is general information, not legal advice.
