While PAN is used for various transactions such as opening a bank account, buying property, or proof of identity, an inactive PAN triggers a domino effect and individuals who have not linked their Aadhaar can face several challenges.
While PAN is used for various transactions such as opening a bank account, buying property, or proof of identity, an inactive PAN triggers a domino effect and individuals who have not linked their Aadhaar can face several challenges.
Taxpayers who fail to link PAN to Aadhaar by March 31 would face a penalty of between £500 and £1,000, the Income Tax Department said.
The final date for linking the Permanent Account Number (PAN) to the Aadhaar biometric is 31 March 2022. Failure to meet the deadline will result in the PAN becoming inactive.
In a statement, the Central Board of Direct Taxes (CBDT) said a late hint from Aadhaar will result in a late fee of £500 if it connects within the next 3 months or by 30 June 2022.
After that, ₹1,000 would have to be paid by taxpayers as a penalty.
PAN’s failure to link to Aadhaar will result in PAN becoming inoperative after March 31, 2022. It can be put back into service upon payment of a penalty, according to a March 29 CBDT notice.
AKM Global, Tax Partner, Amit Maheshwari, said the Government had finally presented a late fee notification, after extending the deadline for linking Aadhaar to PAN several times, stating £1,1,000 for the first three months from the 1st.
“Any failure can cause PAN to become inoperable, which assumes an individual did not have PAN for income tax purposes. It is advisable for taxpayers to check their income tax portal and ensure that Aadhaar and PAN are linked. NRIs may have some concerns since in some cases they don’t have Aadhaar,” Mr Maheshwari said.
Neeraj Agarwala, a partner at Nangia Andersen LLP, said it is now mandatory to link the Aadhaar number to PAN in order to complete income tax-related tasks such as filing income returns.
While PAN is used for various transactions such as opening a bank account, buying property, or proof of identity, an inactive PAN triggers a domino effect and individuals who have not linked their Aadhaar can face several challenges.
“Once your PAN becomes inactive, the individual will be prevented from conducting financial transactions (where disclosure of the PAN is mandatory, such as with mutual funds) and will be subject to TDS with higher rates and Section 272B penalties,” Mr Agarwala said.
For those who do not have access to the income tax portal, the linking process will also be made available via SMS, he added.
