New Deadline For Aadhaar-PAN Linkage. Fine Details You Must Know

The deadline to link the Permanent Account Number (PAN) with Aadhaar Card has been extended till June 30, 2023. The current deadline to link PAN-Aadhaar was March 31, 2023, just 2 days from today.

The Income Tax department has made it mandatory to link the PAN to the Aadhaar card for which the I-T department has issued links on its website for taxpayers to check if their PAN is linked to their Aadhaar.

What Happens If Your Pan Is Not Linked With Aadhaar?

If your PAN is not linked with your Aadhaar, PAN will become inoperative. The Income Tax Department in a recent tweet had said, “As per the IT Act,1961, it is mandatory for all PAN holders, to link their PAN with Aadhaar before 31.3.23. From 1.4.23, the unlinked PAN shall become inoperative.”

There will be several implications for not linking PAN with Aadhaar:

a) The person shall not be able to file the income tax return using the inoperative PAN

b) Pending income tax returns will not be processed

c) Pending refunds cannot be issued to inoperative PANs

d) Pending proceedings as in the case of defective returns cannot be completed once the PAN is inoperative

f) Tax will be required to be deducted at a higher rate as PAN becomes inoperative.

How Much Is The Penalty For Not Linking PAN-Aadhaar?

Failure to link PAN with Aadhaar carries a penalty of Rs 1000 until March 31, 2023, and after that date, unlinked PANs will become inoperative.

Why Is It Mandatory To Link PAN with Aadhaar?

1.  Spotting multiple PAN cards will be easier to detect. An entity can use one of the cards for specific financial activities and pay the taxes associated with those activities by applying for several PAN cards. The other PAN card can be used to hide accounts or transactions from the income tax department, enabling the company to evade paying taxes on them. The government can identify an entity’s identification through his or her Aadhaar card and then have records of all financial transactions through the connected PAN card, closing this tax loophole in the system.
2. The linkage of Aadhaar Card and PAN Card provides an audit trail for the government, which is now required for almost all transactions, enabling the income tax department to have a comprehensive activity trail. Once PAN and Aadhaar are linked, everyone has to pay taxes, enabling the government to broaden its revenue base and pass the savings on to taxpayers in the form of reduced tax rates. 
3. Taxpayers no longer need to carry their PAN card all the time while filing returns. Aadhaar information is also required, making it easier to file forms online. The validity of returns (ITR-V) can be checked using an OTP sent to the Aadhaar-registered mobile number.
4. From a regulatory sense, taxpayers won't be able to submit returns until their PAN card is linked to Aadhaar from next year. Your I-T login will provide a one-page view of all your transactions, making it easier to keep track of taxes by attaching a summary to Aadhaar for future reference. When you link your Aadhaar card to your PAN card, the latter will not be revoked.

How to check Aadhar-PAN card link status online?

1. Go to the Income Tax e-filing portal -- https://www.incometax.gov.in/iec/foportal/

2. On the homepage, select Quick Links, then Link Aadhaar Status

3. Now you will see two fields where the taxpayer needs to enter PAN and Aadhaar numbers

4. Following this, a pop-up message will be displayed.

5. If Aadhaar and PAN are linked, the message will say – Your PAN is already linked to given Aadhaar

6. If your PAN and Aadhaar are not linked, a message will be on your screen saying – PAN not linked with Aadhaar. Please click on 'Link Aadhaar' to link your Aadhaar with PAN

7. If the Aadhaar-PAN link is in progress, the person will see this message – Your Aadhaar-PAN linking request has been sent to UIDAI for validation. Please check the status later by clicking on 'Link Aadhaar Status' link on Home Page.

To check your documents' status via SMS, the taxpayer will need to send SMS to 567678 or 56161. If your Aadhaar card is linked with PAN, following message will be received – Aadhaar is already associated with PAN in ITD database. Thank you for using our services. 

However, if it's not linked, the taxpayer willl be told – Aadhaar is not associated with PAN (number) in ITD database. Thank you for using our services.

Who needs to link Aadhaar and PAN?

According to Section 139AA of the Income Tax Act, every person who was assigned a PAN as of July 1, 2017, and who is eligible for an Aadhaar number, must notify his Aadhaar number in the manner and form specified by law. It is mandatory for such individuals to link their Aadhaar and PAN by March 31, 2023, now June 30, 2023.

For Whom Is Aadhaar-PAN Linkage Not Compulsory?

Aadhaar-PAN linkage requirement does not apply to any individual who is:

a) Residing in the states of Assam, Jammu and Kashmir, and Meghalaya;

b) A non-resident as per the Income-tax Act, 1961;

c) of the age of eighty years or more at any time during the previous year or not a citizen of India.

However, any individuals from the aforementioned categories who voluntarily want to link their Aadhaar with PAN must pay the fee and link, said the Income Tax department.

Is It Mandatory For Minors Who Have PAN and Aadhaar To Link Both?

Every person with a valid PAN and Aadhaar is required to link their Aadhaar with PAN in accordance with CBDT Circular F. No 370142/14/22-TPL dated March 30, 2022, unless they fall under the exempt category.