The Central Board of Direct Taxes (CBDT) has issued a clarification regarding the linking of PAN (Permanent Account Number) with Aadhaar for individuals who are facing difficulties in completing the process. The clarification comes just hours before the deadline for PAN-Aadhaar linking, which is June 30, 2023.
In a tweet from the official income tax department’s Twitter handle, it has been stated that individuals who have paid the penalty for linking PAN with Aadhaar and have provided their consent, but are unable to complete the linking process by June 30, 2023, will be considered by the income tax department. The department will review such cases before declaring the PAN inoperative. It is important to note that if PAN is not linked with Aadhaar by the deadline, the PAN will become inoperative. This means that individuals will not have a valid PAN for cases where it is mandatory to quote it.
The requirement to link PAN with Aadhaar was introduced by the income tax law on July 1, 2017. Since then, the deadline for linking PAN with Aadhaar has been extended multiple times. In Budget 2021, the government introduced Section 234H, which imposes a penalty for linking PAN with Aadhaar after the deadline. Until March 31, 2022, no penalty was levied for late linking. However, a two-tier penalty structure was implemented from April 1, 2022. According to Section 234H, a penalty of Rs 500 would be imposed if PAN is linked with Aadhaar between April 1, 2022, and June 2022. If PAN is linked on or after July 1, 2022, a penalty of Rs 1,000 will be levied.
Previously, the deadline for linking PAN with Aadhaar was March 31, 2023. However, the income tax department extended the deadline by three months until June 30, 2023. It is yet to be announced if the deadline will be extended further.
It is crucial to link PAN with Aadhaar by the given deadline, as failure to do so will render the PAN inoperative. This can lead to consequences such as non-processing of income tax refunds, higher TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) on incomes and expenditures, and restrictions on investing in bank fixed deposits and mutual fund schemes, among others.
Individuals who are facing difficulties in linking PAN with Aadhaar are advised to take immediate action and seek assistance if needed to ensure compliance with the deadline set by the income tax department.
