The Income Tax Department has said that PAN and Aadhaar not linked till March 31 will remain functional for one more year till March 2023, for filing ITR, claiming refunds and other I-T procedures. However, the non-linking of PAN with Aadhaar would attract a penalty.
1) As per a circular issued by CBDT on Wednesday, PAN, not linked to Aadhaar, would become “inoperative” after March 31, 2023.
2) Those taxpayers who link their PAN with biometric Aadhaar by June 30, 2022, would be required to pay late fees of ₹500. Beyond that, the penalty would rise to ₹1,000.
3) Accordingly, in case of failure to intimate the Aadhaar Number by the last extended notified date, the PAN allotted to the person shall be made inoperative in accordance with the provisions of the Act.
4) Further, rule 114AAA of the Income-tax Rules provides that if the 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.
5) The person shall not be able to file a return using the inoperative PAN.
6) Pending returns will not be processed.
7) Pending refunds cannot be issued to inoperative PANs.
8) Pending proceedings as in the case of defective returns cannot be completed once the PAN is inoperative
9) Tax will be required to be deducted at a higher rate as PAN becomes inoperative.
10) In addition to the above, the taxpayer might face difficulty at various other fora like banks and other financial portals, as PAN is one of the important KYC criteria for all kinds of financial transactions.
How to do PAN Aadhaar linking?
For Aadhaar PAN linking through an SMS, one needs to send an SMS at 567678 or 56161. Format of the SMS is as follows:
UIDAIPAN(12digit Aadhaar number) space (10 digit PAN Number).
Means if someone has an Aadhaar Card number ABCDXXXXXXXXXX and PAN Card number ABCXXXXXXX then the format of the SMS will be “UIDAIPANABCDXXXXXXXXXX ABCXXXXXXX”.
