The deadline to link PAN with Aadhaar expired on June 30, 2023. For individuals who missed this deadline, their PAN has become inoperative, leading to potential difficulties in conducting various financial transactions. If you are one of those who have not yet linked their Permanent Account Number (PAN) with Aadhaar, it’s essential to understand the implications and the steps you need to take to make your PAN operative again.
As of July 1, 2023, the government has not extended the deadline for PAN-Aadhaar linking further. Hence, individuals who have not yet completed the linking process will face the consequences of an inoperative PAN. It means that you will be unable to avail certain services where quoting the PAN number is mandatory. Additionally, if you have not filed your income tax return (ITR) yet, linking PAN with Aadhaar is a prerequisite for doing so.
To make your PAN operative again, the Central Board of Direct Taxes (CBDT) has issued a notification dated March 28, 2023, outlining the process. You need to inform the prescribed authority about your Aadhaar and pay a penalty of Rs. 1,000. After completing these steps, your PAN will become operative again within 30 days from the date of Aadhaar linking.
Naveen Wadhwa, DGM, Taxmann.com, explains, “An individual who has missed the last date to link PAN with Aadhaar can link it after the expiry of the deadline also. However, the PAN will become operative again within 30 days from the date of intimation of Aadhaar. For instance, if an individual requests for linking his PAN with Aadhaar on July 20 (after paying the penalty), the PAN will become operative on or before August 19. Do note that till the period PAN remains inoperative, the consequences of not having PAN will apply. Some of these are higher TDS on incomes, no income tax refunds, etc.”
To pay the penalty for linking PAN with Aadhaar, log in to your account on the income tax e-filing website. Access the profile section to find the “Link PAN with Aadhaar” option. After entering the required details, proceed to pay the penalty amount through e-Pay Tax. Ensure that you select the correct option (“Other payments”) while making the penalty payment.
The consequences of an inoperative PAN are significant. It means that you will be unable to quote your PAN wherever it is mandatory. This includes transactions like investing in bank fixed deposits, mutual funds, and opening a demat account. Specific implications of an inoperative PAN are as follows:
A) TDS and TCS may be deducted or collected at a higher rate. B) No refunds will be issued for such PANs. C) Interest will not be payable on such refunds for the period during which the PAN remains inoperative.
Furthermore, an assessing officer may impose a penalty of Rs 10,000 under Section 272B if applicable to the individual due to an inoperative PAN.
In conclusion, if your PAN has become inoperative due to non-linking with Aadhaar, it’s crucial to take immediate action. Follow the steps outlined by the CBDT to make your PAN operative again and avoid the consequences associated with an inoperative PAN.
