Aadhar and Permanent Account Number ( PAN ) became an inevitable part of life of a common man in India. Both have their own purpose to serve. The Aadhar-PAN linking is a hot subject for a time being and the deadline is March 2023. The chairman of the Central Board of Direct Taxes ( CBDT ), stated that as of this point, about 48 crores of the 61 crore PAN issued to individuals have been connected with Aadhaar.
The chairman clearly stated that whoever not linked the Aadhaar with PAN shall not get any type of benefits in both business and tax related filings. Individual PANs that are not linked to the Aadhaar by the end of this financial year (March 31, 2023) would become defunct. In addition, between now and March 31 one must spend Rs 1,000 to link their PAN and Aadhaar.
Both cards have distinct functions, as was already mentioned. India allows people to use their Aadhaar, a unique 14-digit number, as an identity card. PAN reduces the likelihood of tax evasion while also assisting the Income Tax Authorities in tracking all financial transactions that may be necessary in determining an individual’s or company’s tax due. The reasons to link Aadhaar with PAN are:
The circular issued on March 30 clearly stated that once the PAN card of the taxpayer becomes operative, they have to bear all the consequences stated under the Income Tax Act, 1961 like the ending returns won’t be processed, pending refunds will not be made to nonfunctional PANs, faulty return cases can’t be resolved after the PAN becomes inoperable, and tax will need to be deducted at a higher rate.
As PAN is a crucial KYC (know your customer) requirement for all types of financial transactions, in addition to the aforementioned, the taxpayer may encounter difficulties at numerous other sites like banks and other financial portals.
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