The Aadhaar & Other Laws (Amendment) Bill, 2019 was passed in the Lok Sabha on Thursday.
Ravi Shankar Prasad, Union Minister of Electronics and Information Technology, introduced the Bill that will replace an ordinance issued in March.
The Bill was passed by a voice vote.
The Bill makes the use of Aadhaar for opening bank accounts and procuring mobile phone connections voluntary.
Prasad said that the amendments to the Aadhaar Act will give children an option to cancel their Aadhaar number after they turn 18.
"The amendments address the privacy and security concerns," said Prasad.
"It provides that no service or benefit of any scheme will be denied for lack of the card," he added.
The Bill also provides for Rs 1-crore penalty and a jail term for private entities for storing Aadhaar data.
The Bill also amended the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, and the Indian Telegraph Act, 1885, and the Prevention of Money-laundering Act, 2002.
Prasad told Lok Sabha that 123 crore people were currently using the card.
It may be mentioned here that while introducing the Bill, Prasad said the government saved Rs 7.48 lakh crore in the last five years using direct benefit transfer.