The deadline for linking PAN with Aadhaar was June 30, 2023. If you did not link your PAN you’re your Aadhaar by this date, your PAN would become inactive from July 1, 2023. This means you won't be able to use your PAN for certain financial tasks. Many people were expecting an extension of the deadline, but the government has not announced any.
According to the Income Tax Act of 1961, anyone who has a PAN as of July 1, 2017, and is eligible for an Aadhaar number must inform the appropriate authority about their Aadhaar. Failing to do so can lead to consequences under the Act, although there are some exemptions. The Finance Act of 2021 introduced a new section, 234H, to facilitate the linking of PAN with Aadhaar in order to identify fraudulent PANs. This section states that individuals who are required to inform their Aadhaar details as per section 139AA (2) and fail to do so by a specified date may be subject to a fee not exceeding one thousand rupees when they eventually provide their Aadhaar information.
PAN Becomes Inoperative? Know How to Activate?
If an individual fails to link their Aadhaar and PAN by the deadline of June 30, 2023, they can still link them later, but they will have to pay a penalty. In order to make an inoperative PAN card functional again, a simple process needs to be followed. As per a circular from the Central Board of Direct Taxes (CBDT) in March, if you inform the prescribed authority of your Aadhaar details and pay a fee of Rs 1,000, your PAN card will become operational within 30 days.
For instance, if you request to link your PAN with your Aadhaar on July 10, your PAN card will start functioning on or before August 9. However, during the period when the PAN card is not operational, all the rules and consequences under the Income-tax Act will still apply. Rule 114AAA of the Income-tax rules states that if a person's PAN card is inoperative, they will be unable to provide, disclose, or use their PAN, and will be held liable for any consequences arising from this failure. This will have various implications, such as:
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Filing tax returns using an inoperative PAN will not be possible.
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Any pending tax returns will not be processed.
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Pending refunds cannot be issued for inoperative PANs.
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Ongoing proceedings, such as those related to defective returns, cannot be finalized once the PAN becomes inoperative.
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When the PAN becomes inoperative, tax deductions will need to be made at a higher rate.
The income tax department has stated that it will consider cases where individuals have given their consent and paid the fee for linking the PAN with the Aadhaar, but the linking has not yet occurred. They have noticed instances where PAN holders faced difficulties in downloading the challan for Aadhaar-PAN linking after making the payment. The department clarified that individuals can check the status of their challan payment in the 'e-pay tax' section of the portal. If the payment is successful, they can proceed with linking PAN with Aadhaar.
It's important to note that certain individuals are exempted from PAN-Aadhaar linking and will not face the consequences mentioned earlier. This exemption applies to residents of specified states, non-residents as defined by the Act, individuals who are not Indian citizens, and individuals who are eighty years old or older during the previous year.
