The Income Tax Department vide its circular No. 6/2024 dated 23rd April, 2024 requested the taxpayers to link PAN with Aadhaar by 31st May, 2024 to avoid higher deduction of TDS or TCS. If you link your PAN with Aadhaar by 31st May 2024, you won’t have to deal with higher tax deductions or collections under Sections 206AA and 206CC of the Income Tax Act, 1961. This will help you avoid issues with your PAN becoming inactive for any transactions done before 31st March, 2024. Those who have not linked their PANs, their PANs are already inoperative since 1st July, 2023 as the last date to link PAN with Aadhaar was 30th June, 2023.
There are some exempted category of people who do not need to link their PAN with Aadhaar as below:
- Individuals residing in the states of Jammu and Kashmir, Assam and Meghalaya.
- People aged more than 80 years.
- Persons who are not citizens of India.
Consequences of non-linking of PAN with Aadhaar:
- You need to link your PAN with your Aadhaar when filing your Income Tax Return (ITR). If they are not linked, the income tax returns cannot be processed with inoperative PANs.
- It will be difficult to get the refund if PAN-Aadhaar is not linked
- It will be difficult to get government services like application of passport
- Banks do not open the bank account if PAN-Aadhaar is not linked
- Non-linking also results in higher deduction of TDS and TCS. Also, TDS/TCS so deducted will not be available on 26AS or AIS
- It will be difficult to obtain new PAN card in case the old one is damaged/ lost
- Also, the following transactions cannot be executed due to inoperative PAN:
- Purchasing of Mutual Funds
- Opening of Demat account
- Cash deposit exceeding Rs. 50,000 to the bank
- Purchase of demand draft exceeding Rs. 50,000 in a day
- FDs with banks exceeding Rs. 50,000
- Issue of credit cards
- Purchase and sale of goods or services exceeding Rs. 2 lakhs
In conclusion, the taxpayers can reactivate your PAN by making fees of Rs. 1,000. After make the payment, you can proceed with the application process to link your PAN with your Aadhaar card. This two-step procedure will make your PAN card active and allows you to continue using it for all financial transactions
Author Bio
