As per section 139AA of the Income Tax Act, 1961, it is mandatory for all users to link PAN with their Aadhaar number, or else the former will become inoperative from March 31, 2023 . This would mean that users will not be able to conduct transactions where quoting PAN is mandatory, like mutual funds.
It is to be noted that, for people who miss the deadline, PAN will remain functional for 1 more year till March 2023, for filing ITR, claiming refunds and other I-T procedures.
In order to mitigate the inconvenience to taxpayers, as per notification dated March 29, 2022, a window of opportunity has been provided to taxpayers up to March 31, 2023 to intimate their Aadhaar to the prescribed authority for Aadhaar-PAN linking without facing repercussions, the CBDT said, adding such intimation would have to be accompanied by late fees.
The government has extended the deadline several times in the past years. In September last year, the last date was extended from September 30, 2021 to March 31, 2022 in wake of the challenges faced by people due to the coronavirus pandemic.
Aadhaar is issued by the Unique Identification Authority of India (UIDAI) to a resident of India and PAN is a 10-digit alphanumeric number allotted by the income tax (I-T) department to a person, firm or entity.
As per data available, till January 24, 2022, more than 43.34 crore PANs have been linked with Aadhaar. Over 131 crore Aadhaar cards have been issued so far. PAN-Aadhaar linkage would help in eliminating duplicate PAN and curbing tax evasion.
In a tweet, the Central Board of Direct Taxes (CBDT) reminded users to adhere to the last date and link PAN with Aadhaar to help in quick verification of Income Tax returns (ITRs).
Dear Taxpayers,Linking your PAN with Aadhaar will help you in quick e-verification of ITRs.… https://t.co/SzqeUXv4Xf
— Income Tax India (@IncomeTaxIndia) 1648358053000
How to link:
* Visit the e-filing portal of the I-T department (www.incometaxindiaefiling.gov.in)
* Under the ‘Quick Links’ section, click on ‘Link Aadhaar’
* Enter in the PAN, Aadhaar number and other required details.
* Put a tick on the box only if the birth year is mentioned in your Aadhaar card and then click the check box for agreeing to validate your Aadhaar details with UIDAI.
* Enter the captcha code on your screen (visually challenged users can request for one-time password, or OTP, instead of the captcha code).
* Click on the ‘Link Aadhaar’ tab.
Alternatively, it can also be linked via SMS:
* Send SMS from Aadhaar registered mobile number at 567678 or 56161.
* SMS should be in the format: UIDPAN
* Ensure space between UIDPAN, your Aadhaar number and PAN
How to check status:
* Visit e-filing portal of the I-T department (www.incometaxindiaefiling.gov.in)
* Under the ‘Quick Links’ section, click on ‘Link Aadhaar status’ option
* In the screen that opens, enter you PAN and Aadhaar number
* Click on ‘View Link Aadhaar status’
* A pop up will show up on your screen confirming the status
Penalty for non-compliance
In a notification, the CBDT had said delayed intimation of Aadhaar will attract a late fee of Rs 500, in cases where it is linked within the next 3 months or by June 30, 2022.
Thereafter, Rs 1,000 would have to be paid by taxpayers as penalty.
Non-linking of PAN with Aadhaar will lead to PAN becoming inoperative. It can be re-operationalised on payment of penalty, said a CBDT notification dated March 29.
As mentioned above, after March 31, 2023, the PAN of taxpayers who fail to intimate their Aadhaar, as required, shall become inoperative and all the consequences under the Act for not furnishing, intimating or quoting the PAN shall apply to such taxpayers, the CBDT added.
While PAN is used for various transactions like opening a bank account, purchase of immovable property or proof of identity, inactive PAN will trigger domino effect and individual who have not linked their Aadhaar may face multiple challenges.
“Once your PAN becomes inactive, the person will be restricted from doing financial transactions (where quoting of PAN is mandatory like mutual funds), subjected to TDS at higher rates and penalty under section 272B,” Nangia Andersen LLP Partner Neeraj Agarwala told news agency PTI.
(With inputs from agencies)