Linking PAN & Aadhaar is inevitable: What happens after March 31

Earlier, the permanent account number (PAN) of taxpayers, who had not linked it with Aadhaar, was set to become inoperative from April 1, 2022. However, the Central Board of Direct Taxes (CBDT) issued a notification close to the deadline providing relief. Now, taxpayers can link their PAN with Aadhaar even from April 1, 2022 onwards. However, they will have to pay a fee now.

“Earlier the deadline for linking PAN with Aadhaar used to be extended without imposing any fee. But this time the tax authorities have introduced a fee which individual assessees will have to pay,” says Maneet Pal Singh, partner, I.P. Pasricha & Company.

The fee will be Rs 500 for those who link their PAN with Aadhaar between April 1 and June 30, 2022. Those who do so between June 30, 2022 and March 31, 2023, will have to shell out Rs 1,000. 

What happens after March 31

The critical deadline to watch out for now is March 31, 2023. If your PAN has not been linked to Aadhaar by the end of this financial year, it will become inoperative. This will have serious consequences. “You won't be able to file your ITR. And you will not be able to avail of the benefits you get if your PAN is linked to Aadhaar. For instance, if you are entitled to a refund from the Income Tax (IT) Department, it will not be issued,” says Singh.

The taxpayer will also face difficulties at various other fora, like banks and other financial portals, where PAN is required for KYC (know your customer).
 

There is an additional provision under Section 272B of the IT Act that allows an IT officer to levy a penalty of up to Rs 10,000 for non-linking of PAN and Aadhaar. “If you don’t link PAN and Aadhaar within this financial year, it is likely that this provision could be implemented strictly and you could end up paying this heavy fine,” says Paras Nath, partner, tax and regulatory services, T R Chadha & Co LLP.

Compulsory for most 

IT Department's FAQ (frequently asked questions, available on https://bit.ly/3Lq8FqA) says that under Section 139AA of the IT Act, every person who has a PAN as on July 1, 2017, and who is eligible to obtain an Aadhaar number, must mandatorily link Aadhaar and PAN. Some categories of people have been exempted are: those residing in Assam, Jammu and Kashmir, and Meghalaya; non-residents, according to the IT Act, 1961; someone who attained the age of 80 years or more during the previous year; and someone who is not a citizen of India. These exemptions could be altered or revoked later.

Link at the earliest

The steps involved in linking PAN with Aadhaar are simple. Says Nikhil Varma, managing partner, Miglani Varma & Co, Advocates, Solicitors and Consultants: “One needs to visit the I-T Department’s website and fill in PAN and Aadhaar details to link the two. The websites of NSDL e-Governance Infrastructure Limited and UTI Infrastructure Technology and Services Limited also provide this facility.” (See word box for details.)

Varma explains that you can also carry out the linking by sending an SMS to 567678 or 56161 from your registered mobile number in the prescribed format.

With the government adamant on making taxpayers link their PAN with Aadhaar, it is better that you do so at the earliest and continue to enjoy the benefits that come with it. “Delaying will only mean you will end up paying a higher fine, or bear serious consequences after March 31, 2023,” says Singh.

If linking is difficult

If you encounter difficulty in linking PAN with Aadhaar, this could be due to a mismatch in your details (like name, phone number, date of birth) as stored in the Aadhaar and the PAN databases. Rectify the mistake in the database where the error lies so that details match. PAN details can be corrected on the TIN-NSDL website or on the UTIITSL PAN online portal while Aadhaar details can be corrected on the Unique Identification Authority of India (UIDAI) website.