PAN Unlinked with Aadhaar will become Inoperative: Income Tax Dept

The Central Board of Direct Taxes (CBDT) has informed the taxpayers through the official income tax portal that the Permanent Account Number (PAN) cards that not linked with aadhaar card would be inoperative with effect from 1st April, 2023.

“All PAN holders, who do not come under the exempt category as per Notification No. 37/2017, dated 11th May, 2017 and have not linked their Aadhaar with PAN yet, are requested to do so immediately. Failure to do so will lead to the unlinked PAN becoming inoperative,” the income tax department said.

As per Income tax Act, 1961, the last date for linking PAN with Aadhaar is 31.3.2023, for all PAN holders who do not fall under the exempt category, failing which the unlinked PAN shall become inoperative.

Section 139AA of the Income Tax Act provides that every person who has been allotted a permanent account number (PAN) as of the 1st day of July 2017, and who is eligible to obtain an Aadhaar number, shall intimate his Aadhaar number in the prescribed form and manner. In other words, such persons have to mandatorily link their Aadhaar and PAN before the prescribed date.

The Budget 2022 stated that the taxpayers who did not link their PAN Card with the Aadhaar may face a penalty of Rs. 1000 from 1st July. Earlier, till June 30, the charge was Rs. 500. So when an individual links their PAN and Aadhaar, they first have to pay the penalty and request to link PAN aadhaar once the payment reflects in the e-filing site.

As per a notification issued on 11th May, 2017, section 139AA shall not apply to an individual who does not possess the Aadhaar number or the Enrolment ID and is:- (i) residing in the States of Assam, Jammu and Kashmir and Meghalaya; (ii) a non-resident as per the Income-tax Act, 1961; (iii) of the age of eighty years or more at any time during the previous year; (iv) not a citizen of India.

On May 2022, the CBDT has issued a notification on May 10, 2022, amending the income tax rules to make the furnishing of a PAN or Aadhaar compulsory for a further set of transactions. According to the notification, a person must obtain and quote PAN when he enters into any of the following three transactions: High-value cash deposit: Cash deposit (or deposits) aggregating to Rs 20 lakh or more in a financial year, in one or more accounts of a person, with a banking company, a co-operative bank, or a post office will require PAN to be furnished.

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