Consequence of not linking PAN with Aadhaar

The existing proviso to the sub-section (2) of section 139AA, provides that the PAN allotted to a person shall be deemed to be invalid, in case the person fails to intimate the Aadhaar number, on or before the notified date.

In order to protect validity of transactions previously carried out through such PAN, it is proposed to amend the said proviso so as to provide that if a person fails to intimate the Aadhaar number, the PAN allotted to such person shall be made inoperative in the prescribed manner.

This amendment will take effect from 1st September, 2019.

[Clause 41]

Extract of Clause 41 of Finance Bill 2019

41. Amendment of section 139AA.

In section 139AA of the Income-tax Act, in sub-section (2), in the proviso, for the words “deemed to be invalid and the other provisions of this Act shall apply, as if the person had not applied for allotment of permanent account number”, the words “made inoperative after the date so notified in such manner as may be prescribed” shall be substituted with effect from the 1st day of September, 2019.

Note on Clause 41 of Finance Bill 2019

Clause 41 of the Bill seeks to amend section 139AA of the Income-tax Act relating to quoting of Aadhaar number.

Proviso to sub-section (2) of the said section provides for deeming the permanent account number allotted to a person invalid, in case the person fails to intimate the Aadhaar number, on or before a date to be notified in the Official Gazette.

It is proposed to amend the said proviso so as provide that if a person fails to intimate the Aadhaar number, the permanent account number allotted to such person shall be made inoperative after the notified date in the manner as may be provided by rules.

This amendment will take effect from 1st September, 2019.

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3 Comments

  1. vswami says:

    As independently noted and understood, the new budget proposal is , contrary to the impression given, aimed at use of the two IDs, , interchangeably – is there any scope for confusion?!

  2. KS Nagi says:

    Aadhar is not valid for NRIs, and OCIs with non-Indian passport. But PAN has been issued to them and they file their Income Tax returns for income arising in India. It seems now Aadhar will become valid for NRIs with Indian passports. But what happens to OCIs?

    1. TIRU C NARAYAN says:

      Precisely, Sri. KS Nagi. I am in that exact situation. Hope someone in TaxGuru will be able to find out and advise.

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