Did you receive a message from the tax authorities stating that your PAN will soon become inoperative? If so, here are some crucial points you should know.
The Aadhaar card contains a unique 12-digit number issued to every Indian citizen by the Unique Identification Authority of India (UIDAI). This number provides access to the cardholder’s details in the government database, such as biometrics and contact information.
The Permanent Account Number or PAN is a means of identifying taxpayers in India. It contains a unique 10-digit alphanumeric identification number assigned to Indians, particularly those who pay tax.
It is compulsory to link Aadhaar with PAN, as it aids in income tax proceedings.
t is compulsory to link Aadhaar with PAN, as it aids in income tax proceedings.
How to Check If Your Aadhaar and PAN are Linked:
1. Firstly, visit the official income tax website: https://www.incometax.gov.in/iec/foportal/
2. On the home page, click on the “Link Aadhaar status.”
3. Enter your Aadhaar number and PAN number.
4. Click on “View Aadhaar link status.”
A warning message will appear on the screen if your PAN and Aadhaar are not linked.
Page Contents
Who is Exempted from Aadhaar and PAN Linkage?
- Residents of Assam, Jammu and Kashmir, and Meghalaya.
- Non-residents as per the Income-tax Act, 1961.
- Those aged eighty years or more at any time during the previous year.
- Non-citizens of India.
The Income Tax authorities also stated that anyone who falls into one of the above categories can voluntarily link their Aadhaar with PAN without facing any consequences.
How to Link PAN and Aadhaar:
This can be achieved in two ways:
- Submit online or offline link requests for PAN and Aadhaar.
- Pay fees on the NSDL portal under Major head (0021) and Minor head (500) for AY 2023-24.
Why is it Crucial to Link PAN with Aadhaar?
PAN and Aadhaar are unique identification cards that serve as proof of identity for various registration and verification purposes. Linking of PAN and Aadhaar is necessary for the following reasons:
i. To prevent tax evasion: The government can monitor all taxable transactions of a taxpayer by linking Aadhaar and PAN, thereby eliminating tax evasion.
ii. To combat multiple PAN cards: Linking PAN and Aadhaar reduces the chances of individuals or entities applying for multiple PAN cards to defraud the government and evade taxes.
iii. Restrictions on financial activities: Without linking, you cannot open a bank account/demat account, make large deposits, purchase mutual funds above a certain limit, buy or sell items or services beyond a certain value, and your pending returns and refunds will not be processed.
iv. Credit/debit card restrictions: You will not be able to get new credit or debit cards.
v. Higher Tax Deduction for Certain Persons In situations where tax is deductible under Chapter XVIIB for a particular person, it shall be deducted at a higher rate (@ 20% or as the case may be) according to the provisions laid out in Section 206AA.
vi. Higher Tax Collection Rates for Certain Individuals If tax is collectible at source under Chapter XVII-BB for a certain individual, it shall be collected at a higher rate (@ 20% or as the case may be), in line with the provisions in Section 206CC.
vii. No Refunds under the Income Tax Act’s Provisions It’s stipulated that no refund, partial or full, of any tax amount due under the Act’s provisions shall be made.
viii. Non-Payment of Interest on Refunds From the date specified under sub-rule (4) of Rule 114AAA until the date it becomes operative, there will be no interest paid on such refunds.
Finally, if you have not linked your PAN with Aadhaar, your PAN becomes inoperative from 1st July 2023.
Penalty for Non-linking of PAN with Aadhaar:
If PAN and Aadhaar are not linked by 30th June 2023, the PAN becomes inoperative from 1st July 2023. You can still link PAN and Aadhaar by paying a penalty of 1,000 INR to the department.
Moreover, the reactivation process takes around 30 days from the date of linking to reactivate the PAN card.
For instance, if you initiate the process of PAN card activation today, i.e., on July 6th, your PAN card will become operative by August 6th.
Requirements for Linking PAN and Aadhaar:
i. PAN Card
ii. Aadhaar card
iii. Mobile number
So, if you’ve already linked your accounts, verify your status. For those who haven’t, it’s time to hurry and link your PAN with Aadhaar.
Author Bio
Dear Sir,
I have gone through the above article, however, the consequences of circular no. 3 of 2023 dated 28.03.2023 states only four consequences due to non-linking of PAN with Aadhaar Number:
1. Refund of any amount of tax or part thereof, due under the provisions of the Act shall not be made;
2. Interest shall not be payable on such refund for the period, beginning with the date specified under sub-rule (4) and ending with the date on which it becomes operative;
3. Where tax is deductible under Chapter XVIIB in case of such person, such tax shall be deducted at higher rate (@ 20% or as the case may be), in accordance with provisions of section 206AA;
4. Where tax is collectible at source under Chapter XVII-BB in case of such person, such tax shall be collected at higher rate (@ 20% or as the case may be), in accordance with provisions of section 206CC.
No other restrictions, earlier placed by Central Government due to non-linking, are in force from 30th June 2023.
I would request you to take the same into consideration and revise your article accordingly.