If your PAN and Aadhaar are not linked by March 31, then you may face consequences including penalties. The PAN will become invalid and no PAN-related transaction will be allowed. In case the PAN becomes inoperative, and the individual can’t furnish it in the necessary transactions, this may lead to a fine of Rs 10,000.
A PAN that has not been linked with Aadhaar will prohibit the holder from opening a bank account, investing in shares, mutual funds, payment of salary or from transactions wherever a PAN is mandatory such as lower deduction of tax from salary, etc.
As per Section 234H of the Income Tax Act, a penalty may be imposed for linking the documents after the deadline. The government is yet to announce the fine amount, but it will not exceed Rs 1,000, reports suggest.
Also, as per tax experts, failure to furnish PAN where it is mandatory may attract a penalty of Rs 10,000 under Section 272B of the Income Tax Act, 1961, as reported by The Economic Times.
The law to link PAN with Aadhaar was introduced in the Budget of the year 2017. According to Section 139AA of the Income Tax Act, any individual who has been allotted a PAN card and is eligible to obtain an Aadhaar number must link his/her PAN with Aadhaar.
However, Aadhaar-PAN linking currently does not apply to any individual who is residing in the states of Assam, Jammu and Kashmir, and Meghalaya, who is a non-resident as per the Income Tax Act, 1961, who is of the age of eighty years or more or who is not a citizen of India. These exemptions may be changed or removed later.
You can use the Link-Aadhaar service of the e-filing portal and link your Aadhaar. Once done your PAN will become operative.
An invalid PAN or a PAN that has not been linked with Aadhaar by the end of the deadline will disable the individual from performing transactions like opening of bank account, investing in shares, mutual funds etc. or wherever a PAN is mandatory such as lower deduction of tax from salary, etc.
A penalty will be levied under section 234H of the Income-tax Act for linking the documents after the deadline. The government is yet to announce the amount, but it will not exceed Rs 1,000, reports suggest.
Also, as per tax experts, failure to furnish PAN wherever it is required may attract a penalty of Rs 10,000 under the section 272B of the Income Tax Act, 1961, as reported by the Economic Times.
In the 2017 Budget, the law to link PAN with Aadhaar was introduced. According to 139AA section of the Income Tax Act, any individual who has been allotted a PAN card and eligible to obtain an Aadhaar number must link his/her PAN with Aadhaar.
If your PAN and Aadhaar are not linked by March 31, then your PAN will become invalid, and you won’t be able to make any PAN-linked transaction. You may also be fined Rs 1,000 for linking the documents after the deadline. In case the PAN becomes inoperative, and the individual fails to furnish the PAN, then he/she may have to pay a fine of Rs 10,000.
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