Aadhaar, also known as a Unique Identity number, is a 12-digit number issued by the Unique Identification Authority of India (UIDAI). PAN is a 10-digit alphanumeric number allotted by the Income Tax (I-T) department.
Instances had come to the notice of the I-T Department that multiple PANs have been allotted to one person or one PAN has been allotted to more than one person. In order to have a robust way of de-duplication of PAN database, section 139AA was inserted in the Income-tax Act, 1961 (the Act) making it mandatory for a taxpayer who is eligible to obtain Aadhaar (i.e. Individuals), to quote his Aadhaar in the application form for PAN and return of income. Further, linking of PAN and Adhaar has also been mandated to those persons who obtained PAN before July 1, 2017.
From then, linking of PAN and Adhaar has been vigorously promoted by our Government and after many missed deadlines, the last date for the same was notified as March 31, 2022. Nevertheless, linking option is open for individuals by paying fine of INR 500 if linked by June 30, 2022 and INR 1000 if linked by March 31, 2023.
Still there are individuals who have not linked their PAN with Adhaar. For all those individuals, it is advisable to link on/before March 31, 2023. If not, such defaulted individuals might face heavy consequences, which is listed in the recently issued CBDT Circular no. 7/ 2022 dated March 30, 2022.
In this regard, the consequences are analysed in the hands of different persons entering into transactions involving such defaulted individuals in the following paragraphs:
To the defaulting PAN holders:
To the sellers of goods/ services where buyers hold inoperative PAN:
To the buyers of goods/ services where sellers hold inoperative PAN:
• Just like seller, buyers also have an additional burden to check if PAN of seller is inoperative.
• If inoperative, you, as buyers shall deduct taxes at source at higher rates (considering Section 206AB of IT Act), failing which you might be penalised for not complying with tax laws.
Given the above consequences, the following additional points still require clarifications:
1. There is no tool prescribed by the I-T department to identify if a PAN is ‘inoperative’. In that situation, the sellers / buyers would be additionally burdened by the process of verifying the validity of PAN.
2. PAN forms the basis for GSTIN and IE code. Any impact on such registrations on account of invalidity of PAN are not clarified yet.
Hence, Act now, before it’s too late!!
I AM TRYING TO LINK ADHAR NO TO PAN . BUT LINK TO ADHAAR IS NOT WORKING ON INCOME TAX SITE AND EVERY TIME I TRY TO LINK MESSAGE SHOWS” SITE WILL BE UPDATED SHORTLY” IS THERE ANY OTHER WAY TO LINK ADHAR WITH PAN