PAN-Aadhaar linking: Pay Rs 1000 fine as late fee; Know consequences of not linking

Permanent Account Number (PAN card) to become inoperative if Aadhaar and PAN are not linked by the end of this financial year March 31, 2023. From April 1, 2023, you will be required to pay additional fees to the government in the instance your PAN and Aadhaar are not linked.

"Tax would be required to be deducted at a higher rate if PAN becomes inoperative," said a CBDT circular dated March 30, 2022.

The IT department had set a deadline for linking PAN and Aadhaar of 31 March 2022 but later extended it to 30 June 2022. Nonetheless, there was a Rs. 500 fee for those who linked their PAN and Aadhaar between April 1, 2022, and June 30, 2022.

The deadline to link PAN and Aadhaar was subsequently extended by the IT department to March 31, 2023. PAN holders who link PAN-Aadhaar between July 1, 2022, and March 31, 2023, are subject to Rs. 1,000 fine. If PAN holders do not link their PAN with their Aadhaar card, their PAN card will become inactive as of April 1, 2023. To control and prevent tax evasion, the IT department has made it mandatory to link PAN and Aadhaar.

What are the consequences of not linking a PAN with an Aadhaar card?

With inoperative PAN cards, taxpayers are unable to file ITRs or make ITR claims.

The pending returns won't be handled, and pending refunds won't be given to PAN cards that aren't functional.

There will be a higher rate of TCS/TDS applications.

The submission of 15G/15H declarations for no TDS will be prohibited for taxpayers.

Opening a bank account and issuing of debit/credit cards will not be possible.