1. In terms of Section 139AA of the Income Tax Act, 1961 and CBDT circular F. No. 370142/14/22-TPL dated on 30th March 2022, every person who had been allotted a PAN as on 1st July 2017 and was eligible to obtain Aadhaar number, was required to link PAN with AADHAAR, on or before 31st March 2022 or else the PAN would get inoperative.
2. Accordingly, in case of failure to intimate the Aadhaar Number by the last extended notified date i.e. 31.03.2022, the PAN allotted to the person was made inoperative in accordance with the provisions of the Act.
3. Taxpayers who failed to do so were made liable to pay a fee of Rs. 500/- till 30th June 2022 and thereafter a fee of Rs. 1000/- became applicable before submission of PAN-AADHAAR linkage request (in terms of Section 234H as inserted).
4. Further, rule 114AAA of the Income-tax Rules provides that if PAN of a person has become inoperative, he will not be able to furnish, intimate or quote his PAN and shall be liable to all the consequences under the Act for such failure. This will have a number of implications such as:
(i) The person shall not be able to file return using the inoperative PAN
(ii) Pending returns will not be processed
(iii) Pending refunds cannot be issued to inoperative PANs
(iv) Pending proceedings as in the case of defective returns cannot be completed once the PAN is inoperative
(v) Tax will be required to be deducted at a higher rate as PAN becomes inoperative
In addition to the above, the tax payer might face difficulty at various other fora like banks and other financial portals, as PAN is one of the important KYC criterion for all kinds of financial transactions
5. The same circular dated 30.03.2022 had given 1 extra year relaxation, for the period from 01.04.2022 till 31.03.2023 during which it stated that “the said sub-rule shall not have its negative consequences of the nature referred to in the said sub-rule or specified in paras 4 and 4.1 above. However, the tax payer shall be liable to pay a fee in accordance with sub-rule (5A) of rule 114.”
Conclusion
It is extremely important now that if a taxpayer having PAN and who is eligible to obtain Aadhaar, links his PAN with Aadhaar on the Income Tax portal, within 31.03.2023 or else he/ she shall be liable to all the consequences under the Act for such failure as stated above, in addition to PAN remaining inoperative.
Following categories are exempted from Aadhaar-PAN linking
[Refer Department of Revenue Notification no 37/2017 dated 11th May 2017]
(i) NRIs
(ii) Not a citizen of India
(iii) age > 80 years as on date
(iv) state of residence is ASSAM, MEGHALAYA or JAMMU & KASHMIR
Click here to link your PAN and Aadhaar immediately, if not already updated so far
(link as belonging to the ITD, Income Tax Dept only) :
https://eportal.incometax.gov.in/iec/foservices/#/pre-login/bl-link-aadhaar
You can check the status whether such linkage has already been done or not. If not, you’ll find complete procedure and guidance on the aforesaid link of the ITD.
Non linking of PAN with Aadhaar | Rule 114AAA | Inoperative PAN – Clarification
Author Bio
