Restore Your PAN's Functionality After Missing the Aadhaar-PAN Deadline. Pay a ₹1,000 Penalty, Follow Steps, and Await Reinstatement.
The Permanent Account Number, or PAN, is a unique ten-digit alphanumeric identifier issued by the Income Tax Department of India. This number is presented in the form of a laminated card, commonly known as a PAN card, and serves as a crucial tool in the country’s financial infrastructure.
What is a PAN Card?
A PAN card is an essential document for all taxpayers in India. It not only acts as a proof of identity but is also required for a multitude of financial transactions. These include receiving a taxable salary or professional fees, selling or purchasing assets, trading mutual funds, and opening a bank account. It is an integral part of conducting financial transactions that have a taxable component, as it helps prevent tax evasion.
Businesses also use PAN for issuing invoices and establishing their identity in the market. Moreover, it is a mandatory requirement for filing income tax returns in India, as it enables the government to track tax payments and taxable activities under the Indian Income Tax Act.
Why Must You Link Your PAN with Aadhaar?
The Government of India has made it mandatory to link PAN cards with Aadhaar numbers. This decision aims to streamline the taxation process, ensure better compliance with tax laws, and bring about transparency and reduced fraud in the financial system.
Failure to link the PAN with Aadhaar can result in several consequences. The government has outlined that an unlinked PAN may become inoperative, leading to potential issues in filing income tax returns. Furthermore, any pending tax refunds may be withheld. Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) rates could also be higher for individuals whose PAN is not linked with Aadhaar.
Who Should Link
If you got a permanent account number (PAN) on or before July 1, 2017, and can get an Aadhaar number, then this rule applies to you. It’s simple but important: if you fit into this category, you have to connect your Aadhaar and PAN.
This connection is like bringing two puzzle pieces together. It makes things easier for identifying people and handling taxes. It smoothly joins those who already have PAN with the Aadhaar system. This makes managing money and taxes more organised. As rules change, making sure your Aadhaar and PAN are linked is a big step to follow the rules and stay well-connected in the world of money and taxes.
How to Make PAN Operative Again
Missed the June 30, 2023 Aadhaar-PAN linkage deadline? Don’t worry. You can restore your inoperative PAN by following these steps. Begin by paying a ₹ 1,000 penalty for lateness. Then, inform the prescribed authority about your intention to link the Aadhaar-PAN. After successful payment and intimation, wait for 30 days for processing.
During this period, the income tax department verifies your details and penalty payment. Once approved, your PAN becomes operative again. Remember to stay compliant to avoid future issues. In a nutshell, despite missing the deadline, you can rejuvenate your PAN by paying the penalty, notifying authorities, and waiting for reinstatement. Your financial dealings will soon be back on track.
How to Pay Penalty to Link PAN with Aadhaar
Learn how to link your PAN-Aadhaar with a penalty, as per the guidelines from the Income Tax website.
- Step 1: Log in to https://www.incometax.gov.in/iec/foportal/. On the Dashboard, navigate to the Profile Section, and under the Link Aadhar to PAN option, select Link Aadhar.
- Step 2: Provide your PAN and Aadhar Number.
- Step 3: Click ‘Continue to Pay Through e-Pay Tax.’
- Step 4: Enter your PAN, confirm PAN, and mobile number for OTP receipt.
- Step 5: After OTP verification, you’ll be directed to the e-Pay Tax page.
- Step 6: Proceed by clicking on the Income Tax Tile.
- Step 7: Choose Assessment Year (AY) as 2024-25 and Payment Type as Other Receipts (500). Then, click Continue.
- Step 8(a): The applicable amount will be pre-filled under Others.
Following the fee payment, you can link your Aadhaar number to PAN via the e-Filing Portal.
What Are the Consequences of Not Linking Your Pan With Aadhaar?
According to the directive from the Indian government, failure to link your PAN with your Aadhaar number can lead to the following:
- Your PAN card may become inoperative.
- You could encounter issues when filing your income tax returns.
- Any pending tax refunds could be withheld.
- The tax deducted at source (TDS) might be higher.
- The tax collected at source (TCS) could also be higher if your PAN is not linked.
Therefore, it is a real and significant matter. The Indian government has mandated the linking of PAN with Aadhaar to enhance the taxation process and ensure better compliance. Non-compliance with this requirement can disrupt your ability to carry out financial transactions and meet tax obligations in India.
For Whom is Aadhaar-PAN Linkage Not Compulsory?
The mandate for linking Aadhaar with PAN might seem universal, but there are specific cases where it is not obligatory. The following individuals are exempt from this requirement:
- Residents of Specific States: If you reside in Assam, Jammu and Kashmir, or Meghalaya, you are not bound by the Aadhaar-PAN linkage rule.
- Non-Residents: According to the Income-tax Act, 1961, if you’re classified as a non-resident, you’re not obligated to link your Aadhaar with PAN.
- Elderly Individuals: If you’re aged eighty years or more during the previous year, the Aadhaar-PAN linkage doesn’t apply to you.
- Non-Citizens: Individuals who are not citizens of India are also excluded from the mandatory Aadhaar-PAN linkage.
The Income Tax Administration has clarified that individuals falling within these categories can still voluntarily link their Aadhaar with PAN. However, any consequences arising from non-linkage will not be applicable to them. This acknowledgment of unique circumstances ensures a more balanced approach to the Aadhaar-PAN linkage requirement.
Why Is It Important?
Linking the Permanent Account Number (PAN) with Aadhaar is of utmost importance due to a number of reasons:
- Legally mandated: The Indian government has made it compulsory for taxpayers to link their PAN with their Aadhaar number. This was done to streamline and authenticate the tax process.
- Prevents Tax Evasion: Linking PAN and Aadhaar helps the government keep track of taxable transactions of individuals and firms, reducing the occurrence of tax evasion.
- Consolidates information: The integration of Aadhaar and PAN into a single system allows the government to have a comprehensive view of a person’s financial transactions, ensuring better compliance with tax laws.
- Improves the accuracy of data: Linking PAN with Aadhaar ensures accuracy and consistency of data. This helps in eliminating the chances of individuals holding multiple PANs, which could potentially be used for fraudulent activities.
- Facilitates e-verification: Once the PAN is linked with Aadhaar, taxpayers can quickly e-verify their income tax returns using their Aadhaar number. If you have anydoubts, talk to ca, clarify your doubts today!
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FAQ
Can I link PAN and Aadhaar after June 30?
If the connection is not established, the pan will cease to function from July 1, 2023. Without a functional PAN, the individual won't be able to submit their tax return or receive a tax refund. However, it is possible to link an Aadhaar with a PAN by paying a fine of ₹ 1,000.
What is the late fee for Aadhaar linking PAN card after 30 June 2023?
Beyond the designated time frame for linking PAN with Aadhaar, the option remains available albeit with a charge. As per the regulations of the Income Tax Department, reviving a PAN's functionality can be accomplished within 30 days following the submission of Aadhaar to the specified authority and settling a penalty of ₹ 1,000.
What is the last date of linking PAN for Aadhaar 2023?
The cutoff date for associating PAN with Aadhaar was June 30th. PANs that were not linked to Aadhaar ceased to function starting from July 1, 2023. The deadline for linking Aadhaar and PAN was June 30, 2023, and the government has not indicated any intention to extend this timeframe.
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