Link Aadhaar to PAN by March 31: Penalty up to Rs. 1000 for not linking PAN with Aadhaar Card

Link Aadhaar to PAN by March 31: Penalty up to Rs. 1000 for not linking PAN with Aadhaar Card

The deadline for linking your permanent account number (PAN) to your biometric Aadhaar is March 31. According to section 139AA of the Income Tax Act
Link Aadhaar to PAN by March 31: Penalty up to Rs. 1000 for not linking PAN with Aadhaar Card
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The deadline for linking your permanent account number (PAN) to your biometric Aadhaar is March 31. According to section 139AA of the Income Tax Act, 1961, all users must connect their PAN with their Aadhaar number by March 31, 2023, otherwise the former would become inactive. This means that customers will be unable to execute transactions that need the usage of a PAN, such as mutual funds.

It's worth noting that those who miss the deadline will still be able to use their PAN for submitting ITRs, claiming refunds, and other I-T processes for another year, until March 2023.

Taxpayers have till March 31, 2023 to inform their Aadhaar to the mandated body for Aadhaar-PAN linkage without fearing penalties, according to a notice dated March 29, 2022, the CBDT stated, adding that such intimation will have to be accompanied by late fines.

The deadline has been extended by the administration multiple times in recent years. The deadline was extended from September 30, 2021 to March 31, 2022 in September of last year, in response to the problems individuals have encountered as a result of the coronavirus epidemic.

Non-compliance will result in a penalty:

In a statement, the CBDT stated that if Aadhaar is not connected within the next three months or by June 30, 2022, a late fee of Rs 500 will be charged.

Following that, taxpayers would be required to pay a penalty of Rs 1,000.

PANs will become inactive if they are not linked to Aadhaar. According to a CBDT notification dated March 29, it can be re-operationalized upon payment of a penalty.

As previously stated, after March 31, 2023, taxpayers who fail to notify their Aadhaar as required would have their PAN deactivated, and all repercussions under the Act for not providing, informing, or quoting the PAN will apply to such taxpayers, according to the CBDT.

While PAN is utilised for a variety of operations such as opening a bank account, purchasing real estate, and proving identification, an inactive PAN would have a domino effect, putting those who have not connected their Aadhaar at risk.

"Once your PAN becomes inactive, you would be barred from undertaking financial transactions (where quoting of your PAN is required, such as mutual funds), subject to increased TDS rates, and a penalty under section 272B," said Neeraj Agarwala, a partner at Nangia Andersen LLP.