Govt issues advisory to link PAN with Aadhaar else PAN will be invalidated.

Govt issues advisory to link PAN with Aadhaar else PAN will be invalidated.

The Central Board of Direct Taxes (CBDT) recently tweeted that the Permanent Account Number (PAN) that is not linked with aadhaar card would be inoperative with effect from 1st April 2023. “As per Income-tax Act, 1961, the last date for linking PAN with Aadhaar is 31.3.2023, for all PAN holders who do not fall under the exempt category, failing which the unlinked PAN shall become inoperative. Don’t delay, link today!” the income tax department said. “All PAN holders, who do not come under the exempt category as per Notification No. 37/2017 dated 17th May 2017 and have not linked their aadhaar with PAN yet, are requested to do so immediately. PAN can be linked with aadhaar on www.incometax.gov.in after paying a fee of Rs. 1,000.” It may be reckoned that section 139AA of the Income Tax Act 1961 requires that every person who has been allotted a permanent account number (PAN) as of the 1st day of July 2017, and who is eligible to obtain an Aadhaar number, shall intimate his Aadhaar number in the prescribed form and manner.

In other words, such persons have to mandatorily link their Aadhaar and PAN before the prescribed date. The prescribed fate was 31.03.2022 without penalty and 31.03.2023 with a penalty of Rs. 1000. The Budget 2022 stated that the taxpayers who did not link their PAN Card with their Aadhaar may face a penalty of Rs. 1000 from 1st July.

Under the present provisions under the Income Tax Act,1961 obtaining and quoting of PAN is mandatory under situations like where the total income exceeds Rs. 250000 per annum or where the Gross Receipt of the business is more than Rs. 500000. Also recently CBDT has made furnishing of PAN compulsory where cash deposit or withdrawal aggregating to Rs 20 lakh or more in a financial year, in one or more accounts of a person, with a banking company, a co-operative bank, or a post office. Furnishing PAN is also required for opening a current or cash credit bank account.

Invalidation of PAN may have severe consequences such as non-furnishing of PAN will increase the TDS rate to 20%, a penalty of Rs. 10000 may be levied u/s 272B, and also quoting of PAN is required for undertaking many transactions like buying or selling immovable property or mutual fund or foreign currency, etc.