PAN Aadhaar Link Penalty And What Happens If Pan Card Is Not Linked To Aadhaar Card?

PAN Aadhaar Link Penalty And What Happens If Pan Card Is Not Linked To Aadhaar Card?

The Permanent Account Number (PAN) card and Aadhaar card are critical identification documents for Indian citizens. The Income Tax (IT) department issues the PAN card, while the Unique Identification Authority of India (UIDAI) issues the Aadhaar card. 

PAN is a unique identification number issued to individuals and businesses for tax purposes. The Aadhaar number is a 12-digit unique identification number issued for all residents. However, the IT department has made linking PAN and Aadhaar cards mandatory. 

Circular on PAN-Aadhaar Linking

The IT department issued a circular that it is mandatory for all PAN-holders (except those who fall under the exempt category) to link their PAN-Aadhaar within 30th June 2023. Initially, the IT department mandated to link PAN-Aadhaar by 31st March 2022 and then extended it to 30th June 2022. However, people who linked their PAN-Aadhaar between 1st July 2022 to 30th June 2022 had to pay a fine of Rs.500.

Subsequently, the IT department extended the last date to link PAN-Aadhaar to 30th June 2023. PAN holders who link PAN-Aadhaar between 1st July 2022 to 30th June 2023 must pay a penalty of Rs.1,000. PAN card will become inoperative from 01st July 2023 if PAN holders do not link it with their Aadhaar card. The IT department has mandated linking PAN-Aadhaar to regulate and curb tax evasion.

Who falls under the exempt category for PAN-Aadhaar linking?

The exempt category people need not link PAN-Aadhaar within 30th June 2023. The exempt category is as follows:

• Individuals residing in the states of Jammu and Kashmir, Assam and Meghalaya.
• A non-resident taxable person as per the Income-tax Act, 1961.
• People aged more than 80 years (Super Senior Citizens).
• Persons who are not citizens of India.

Last date to link PAN with Aadhaar card

The last date for PAN-Aadhaar linking is 30th June 2023. PAN cards not linked with Aadhaar will become inoperative after 1st July 2023.

Importance of linking PAN with Aadhaar card

• The PAN card of a person will become inoperative when it is not linked to an Aadhaar card.
• PAN-Aadhaar linking is required when filing the Income Tax Return (ITR). The IT department may reject the ITR when PAN and Aadhaar are not linked.
• PAN and Aadhaar cards are required to be submitted to get government services, such as applying for a passport, obtaining subsidies and opening a bank account. Thus, it is difficult to access government services when PAN and Aadhaar cards are not linked.
• When the PAN-Aadhaar is not linked, getting a new PAN card may be difficult if the old one is damaged or lost since it is mandatory to mention the Aadhaar card number while applying for a new PAN card.

Consequences of not linking PAN with Aadhaar card

When the PAN-Aadhaar cards are not linked within the last date, it becomes inoperative as a result of which:

• Taxpayers cannot file ITR or claim ITR with inoperative PAN cards.
• The pending returns will not be processed, and pending refunds will not be issued to inoperative PAN cards.
• The TCS/TDS will be applicable at a higher rate.
• The TCS/TDS credit will not appear in Form 26AS, and TCS/TDS certificates will not be available.
• Taxpayers will be unable to submit 15G/15H declarations for nil TDS.
•  The following transactions cannot be done since the PAN card will be inoperative:
  • Open a bank account.
  • Issue of debit/credit cards.
  • Purchase of mutual funds unit exceeding Rs.50,000.
  • Cash deposit with a bank or post office during a day exceeding Rs.50,000.
  • Purchase of a bank draft or pay order in cash exceeding Rs.50,000 in a day.
  • A time deposit with banks, Nidhi, Non-Banking Financial Corporations (NBFCs), etc., exceeding Rs.50,000 or aggregating to more than Rs.2,50,000 during a financial year.
  • Payment for one or more prepaid payment instruments as defined by the Reserve Bank of India (RBI) through bank draft, pay order or banker’s cheque aggregating to more than Rs.50,000 in a financial year.
  • Sale or purchase of goods or services by any person more than Rs.2,00,000 per transaction.

However, the PAN can be made operative again in 30 days, upon intimation of Aadhaar number to the prescribed authority after payment of fee of Rs.1,000.

Penalty for non-linking of PAN with Aadhaar card

Earlier, the penalty to link PAN-Aadhaar was Rs.500. Currently, the taxpayers should link PAN-Aadhaar within the last date of 30th June 2023 by paying a late penalty of Rs.1,000. Thus, they must pay the penalty before filing for the PAN-Aadhaar link on the Income Tax website. However, they need to ensure they have a valid PAN number, Aadhaar number and mobile number to pay the penalty.

Follow the below steps to pay the penalty for linking PAN-Aadhaar numbers:

Step 1: Visit the TIN website.

Step 2: Under the ‘Non-TDS/TCS’ heading, click the ‘Proceed’ button under ‘Challan no./ITNS 280’.

Step 3: Select the option ‘(0021) Income Tax (other than companies)’ for the tax applicable option and select the option ‘500 (Other Receipts)’ for the type of payment option.

Step 4: Select the mode of payment, i.e. net banking or debit card.

Step 5: Enter the PAN number, assessment year, address, email, mobile number, and captcha code and click on the ‘Proceed’ button to make the payment. 

Step 6: After payment, send a request to link the PAN-Aadhaar after four to five days.

How to link a PAN with an Aadhaar card?

Taxpayers can link their PAN with their Aadhaar after four to five days of paying the penalty by following the steps below:

Step 1: Go to the Income Tax e-filing portal.

Step 2: Under the ‘Quick Links’ heading on the left-hand side of the homepage, click on the ‘Link Aadhaar’ option.

Step 3: Enter the ‘PAN’ and ‘Aadhaar Number’ and click the ‘Validate’ button.

Step 4: A pop-up message stating ‘Your payment details are verified’ will appear when the penalty payment has been verified. Click the ‘Continue’ button to submit the linking request.

Step 5: Enter the required details and click the ‘Link Aadhaar’ button.

Step 6: Enter the OTP received on the mobile number.

Step 7: The request to link the PAN-Aadhaar card will be successfully submitted. 

A taxpayer can also visit a PAN card centre, fill out the appropriate form and submit it with photocopies of PAN and Aadhaar cards for PAN-Aadhaar linking.

Frequently Asked Questions

Is it compulsory to link PAN with the Aadhaar card?

Yes. The IT department has made it compulsory to link PAN with the Aadhaar card by 30th June 2023, or else the PAN will become inoperative.

What happens if the PAN card is not linked to the Aadhaar card?

When the PAN is not linked with the Aadhaar card, the PAN card becomes inoperative from 1st July 2023. The taxpayers cannot file their ITRs, get tax refunds or access financial services, such as opening a bank account, or a Demat account, getting credit/debit cards, etc., when the PAN becomes inoperative. 

How to check if my PAN card is linked to an Aadhaar card?

Any person can check if the PAN is linked with an Aadhaar card by following the below steps:

Step 1: Go to the Income Tax e-filing portal.

Step 2: Under the ‘Quick Links’ heading on the left-hand side of the homepage, click on the ‘Link Aadhaar Status’ option.

Step 3: Enter the ‘PAN’ and ‘Aadhaar Number’ and click the ‘View Link Aadhaar Status’ button.

A message will appear on the screen stating that your PAN is linked with the Aadhaar number.

Is it necessary to get an Aadhaar card for super senior citizens?

No. Super senior citizens (aged above 80 years) are exempted from linking PAN with Aadhaar. Thus, their PAN card will not be operative after 1st July 2023 even if they have not linked with an Aadhaar card.

Is PAN-Aadhaar linking free?

No. Taxpayers who link their PAN with their Aadhaar number after 1sy July 2022 to 30th June 2023 should pay a penalty of Rs.1,000 before submitting a request for PAN-Aadhaar linking.

Can we link PAN and Aadhaar cards from mobile?

Yes, you can go to the Income Tax e-filing portal on your mobile and follow the steps provided above for linking PAN-Aadhaar to submit a request for PAN-Aadhaar linking within the last date.