According to the Central Board of Direct Taxes (CBDT) notice, the last date for linking PAN with Aadhaar cards was 30 June 2023. Though the crucial deadline has passed, some of us have still not completed the process. This means their PAN card has now become inactive. Find out what you can do if you are one of them.
A PAN card is a ten-digit alphanumeric code issued by the Indian Income Tax Department for residents of the country, mostly those who are taxpayers or fall under the category of a taxpayer. It is also used as proof of identity to carry out financial transactions by financial institutions.
The Unique Identification Authority of India issues the 12-digit personal identification number that can be found on Aadhaar cards. Anywhere in India, the number can be used as identification and proof of address.
Consequences of a non-functional PAN
1. Your tax refunds will not be processed by the IT department and higher TDS and TCS will be charged on incomes and expenditures, in accordance with the provisions of Section 206AA and Section 206CC, respectively. Additionally, for the period starting on the date stated under sub-rule (4) of rule 114 AAA and ending on the date it becomes effective, interest shall not be payable to you on such refund.
2. You won’t be able to invest in stocks, mutual funds, fixed deposits, or other savings schemes, and banking services, like fund transfer via NEFT or RTGS and deposits, will be suspended.
According to the CBDT notice, “These consequences shall take effect from 1st July, 2023, and will continue till the PAN becomes operative.”
How to make PAN functional again
Yes, you can make your PAN operative again after notifying the concerned authority and paying the penalty fee of INR 1,000. However, it will take 30 days for the PAN card to activate.
A July 2023 Economic Times article quotes Naveen Wadhwa, DGM, Taxmann.com, saying, “An individual who has missed the last date to link PAN with Aadhaar can link it after the expiry of the deadline also. However, the PAN will become operative again within 30 days from the date of intimation of Aadhaar. For instance, if an individual requests for linking of his PAN with Aadhaar on July 20 (after paying the penalty), the PAN will become operative on or before August 19. Do note that till the period PAN remains inoperative, the consequences of not having PAN will apply. Some of these are higher TDS on incomes, no income tax refunds, etc.”
This means that the process of activating PAN and paying the penalty is very simple. All you need to do is log into your account on the income tax e-filing website. Then, to access the ‘Link PAN with Aadhaar’ option, visit the profile section, fill in the required details and pay the penalty. Your PAN will be activated within 30 days of submitting the request.
Who is exempted from linking PAN with Aadhaar?
The following people are exempted from linking PAN with Aadhaar:
— Individuals residing in the states of Assam and Meghalaya, as well as the Union territory of Jammu and Kashmir.
— Non-resident Indians (NRI) according to the Income Tax Act, 1961
— Individuals who are super senior citizens according to the Income Tax Act, 1961. These include individuals eighty years of age and above.
However, those in any of the aforementioned categories who choose to link their Aadhaar with PAN are not compelled to pay a fee. However, these exemptions could change in the future.
Linking PAN with Aadhaar is a quick and easy process that shouldn’t take more than 10 to 15 minutes. Complete the procedure before CBDT further increases the fine for not adhering to the rules.
Additionally, make sure you are filling in your information on a legitimate Income Tax website because PAN linking with Aadhaar-related cyber frauds are increasingly common. Consider consulting a specialist in the industry, such as a chartered accountant, or someone who has completed the process before.
(Hero and Featured Image: Courtesy of PageImp/ CC BY-SA 4.0 /Wikimedia Commons)
Frequently Asked Questions (FAQs)
Answer: The last date of linking your PAN and Aadhaar has expired on 30 June 2023. However, you can still do so by paying INR 10,00 as fine.
Answer: You can check your PAN linking status on the income tax e-portal. There is an option to check the status under the PAN link section.
Answer: You can check your Aadhaar linked phone number on the official UIDAI website or at your nearest Aadhaar Seva Kendra centre.
Answer: Follow these steps to check whether your PAN and Aadhaar are linked. Firstly, visit the Income Tax Department's official website, and open the 'Quick Links' section to select 'Link Aadhaar Status'. Then enter your PAN and Aadhaar card numbers, and click on the 'View Link Aadhaar Status' option.