The last day to link your Permanent Account Number (PAN) with your Aadhaar card is June 30, 2023. To link your PAN with Aadhaar, you need to visit www.incometax.gov.in. However, failing to complete the process will have several consequences.
PAN is a unique number issued to individuals and businesses for tax purposes. The Aadhaar number is issued to all residents. The income tax (I-T) department has made linking PAN and Aadhaar cards mandatory to ease financial transactions.
Who needs to link Aadhaar and PAN? Section 139AA of the Income Tax Act provides that every individual who has been allotted a permanent account number (PAN) as of the 1 day of July 2017 and who is eligible to obtain an Aadhaar number shall intimate his Aadhaar number in the prescribed form and manner. In other words, such persons must link their Aadhaar and PAN before the prescribed date, details mentioned on the Income Tax Department’s website.
PAN not linked with Aadhaar card: A person who fails to intimate the Aadhaar number following section 139AA of the Income-tax Act read with rule 114AAA shall face the following consequences:
- Failing to link your Aadhaar and PAN will automatically make the PAN inoperative. You will not get a refund of any amount of tax due under the provisions of the Income Tax Act.
- No interest will be payable to you on such refund for the period, beginning with the date specified under sub-rule (4) of rule 114AAA and ending with the date on which it becomes operative;
- Where tax is deductible under Chapter XVJJ-B in case of such a person, such tax will be deducted at a higher rate, following the provisions of section 206AA;
- Where tax is collectable at source under Chapter XVJJ-BB in case of such person, such tax shall be collected at a higher rate, per the provisions of section 206CC.
- These consequences will come into effect from July 1, 2023, until the PAN becomes operative. To make it operative, you will need to pay a fee of Rs 1,000 to make the PAN operative by intimating it with the Aadhaar number.
- You may not be able to file income tax returns (ITR) without PAN, due to which you may not get the due returns you were eligible for.
- You need PAN to make several bank transactions. For instance, you need to furnish PAN details for depositing over Rs 50,000 in a single day in the bank. With PAN becoming inoperative, you cannot carry out such transactions.
Shilpa Mankar Ahluwalia, Partner & Head - Fintech, Shardul Amarchand Mangaldas & Co. said, "Failure to link PAN and Aadhaar by June 30 will make financial and tax transactions difficult for all those not in compliance. Without an operative PAN, individuals cannot make tax filings or claim tax refunds. There may also be higher tax implications. Tax and government authorities consider the linkage as an important step to strengthen KYC checks and monitor financial transactions under the PMLA."
These consequences shall take effect from July 1, 2023, and continue till the PAN becomes operative. A fee of Rs 1000 will continue to apply to make the PAN operative by intimating the Aadhaar number.
Amit Gupta, Managing Director at SAG Infotech said, "Linking PAN (Permanent Account Number) with Aadhaar card has become an important requirement for individuals in India. Failure to link PAN with the Aadhaar card can have several consequences. First, it may invalidate the PAN card, preventing it from being used for various financial and government transactions. In addition, without linking PAN and Aadhaar, there may be problems in filing income tax returns, as the Aadhaar number is required for electronic verification. Failure to comply with the mandate to link PAN and Aadhaar could result in penalties or legal consequences from the Income Tax Department. In addition, the linked PAN and Aadhaar data facilitates the government in curbing tax evasion and identifying individuals with multiple PAN cards. Therefore, it is important to ensure timely and accurate linking of PAN with Aadhaar to avoid inconvenience and comply with legal requirements."
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FAQs
PAN holders who link PAN-Aadhaar between 1st July 2022 to 30th June 2023 must pay a penalty of Rs.1,000. PAN card will become inoperative from 01st July 2023 if PAN holders do not link it with their Aadhaar card.
Do we need to pay penalty for Aadhaar-PAN link? ›
It is still possible to connect your PAN and Aadhaar even if the June 30, 2023 deadline passes. However, if you miss the deadline, your PAN card will stop working. It must be connected to the Aadhaar number before it can be turned on. If PAN-Aadhaar is linked after the deadline, there is a ₹1,000 fine.
Does linking Aadhaar with PAN cost money? ›
However, you can still try to link your Aadhaar with PAN card via the Income Tax website by paying the prescribed application fee of Rs. 1,000. Read further to know how to link Aadhaar to PAN Card online in this article below and get your documents linked at the earliest.
What is the penalty for inoperative PAN? ›
Over Rs 600 crore collected as penalty for not linking PAN with Aadhaar; 11.48 crore PANs still unlinked. Last date for linking PAN with Aadhaar was June 30, 2023. Inoperative PANs face higher TDS and TCS rates. PANs can be made operative again by paying a late fee of Rs 1,000.
How can I make inoperative PAN operative for NRI? ›
NRIs whose PANs have expired/inoperative are asked to notify their respective JAO, along with supporting papers, and request to update their residential status in the PAN database. Option 2: NRI can apply for Aadhar card by visiting the nearest Aadhar Kendra in India.
How many days does it take to link PAN with Aadhar? ›
How long does it usually take for my PAN to get linked with Aadhaar after I have completed the process? It takes upto 6-7 days for linking PAN and Aadhaar. Once you have started the linking process by going on the Income Tax Portal, please click on the button below to check the linking status.
What is the TDS rate for PAN Aadhaar not linked? ›
The last deadline given by the government to link both the documents was June 30, 2023. The 'inoperative' PAN status will mean a higher TDS rate of 20 per cent for individuals. There are several situations where this surplus TDS could cause a major impact on your savings and income.
Why to pay 1,000 for PAN Aadhaar link? ›
PAN holders who link PAN-Aadhaar between 1st July 2022 to 30th June 2023 must pay a penalty of Rs.1,000. PAN card will become inoperative from 01st July 2023 if PAN holders do not link it with their Aadhaar card. The IT department has mandated linking PAN-Aadhaar to regulate and curb tax evasion.
Where can I link Aadhaar and PAN card for free? ›
For linking your PAN with Aadhaar, you may visit the website of Income Tax Department and follow the instructions.
What to do if PAN and Aadhaar linking fails after paying rs 1000? ›
Any inconsistency in the information entered can cause the linking to fail. Retry the linking process: You can link your PAN and Aadhaar again by following the same steps you took before. If it fails again, you can try alternative methods like linking through the income tax e-filing or NSDL websites.
While Indian citizens are not advised to surrender the PAN card they are using as it can be used as a valid document for identity proof,. The PAN card will then be cancelled and the holder can surrender it to the tax official.
Who are exempted from PAN? ›
Exemption available for specified NRIs
residing in the states of Assam, Jammu and Kashmir and Meghalaya; or. non-resident as per the Income-tax Act, 1961; or. of age 80 years or more at any time during the previous year; or.
Is PAN mandatory for non-resident? ›
Section 206AA
Under this section of the Income Tax Act, 1961, every resident and non-resident taxpayer who receives any taxable income is required to furnish the PAN to the payer of such income.
How long does it take to make PAN operative? ›
The process will take up to 30 days from the date of linking, for instance, if you initiate the linking process on July 11 (after paying the penalty), your PAN will become operative on or before August 10. What are the consequences of having an inoperative PAN?
Is NRI exempted from linking Aadhaar with PAN? ›
NRIs who do not have Aadhaar are exempted from the guideline of linking of PAN-Aadhaar provided they update their residential status as Non-Resident in the income tax portal. However if an NRI holds an Aadhaar, the exemption does not apply, and they will have to link their PAN with Aadhaar.
Do OCI holders need to link PAN with Aadhaar? ›
OCI holders are not mandated to link PAN with Aadhaar unless they intend to file income tax returns or engage in financial transactions requiring PAN verification.
What happens if PAN card is not linked with bank account? ›
Failure to link your PAN card to your bank account restricts you from opening a fixed deposit account or depositing more than Rs. 50,000 in cash. Furthermore, if the interest earned on the fixed deposit account surpasses Rs. 40,000 (exceeding the current 10%), TDS will be deducted at 20%.
How can I delink my Aadhar card with PAN card? ›
Step 1: Obtain the processing details of your PAN card from the PAN service provider. Step 2: Collect the Audit Log from ITBA through the RCC. Step 3: After the identification of the reason behind the wrong linking of PAN card and Aadhaar card, it must be decided whether delinking is required.
Whose PAN is already linked with Aadhar? ›
Through SMS:
― Type “UIDPAN” followed by your 12-digit Aadhaar number and your Permanent Account Number. The SMS should be sent in the format UDIPANAadhaar number. ― Send the text to 56161 or 567678. ― You will receive a message regarding whether your Aadhaar and PAN are linked.
