Lets Talk Compliance – Alert to PAN Card Holders! Link PAN with Aadhaar on or before June 30, 2020

The Central Board of Direct Taxes (CBDT) has stated that a Permanent Account Number (PAN) will become inoperative if not linked with Aadhaar by 30^th June’2020 (extended from 31.03.2020 due to COVID-19 Lockdown). These stringent measures are taken in order to weed out fake PAN cards and accounts from the system and to track financial transactions.

The CBDT clearly stated that it will not extend the PAN Adhaar linking date since in the past it has been given multiple extensions for linking of Aadhaar as below:

* approx.

To whom the PAN –Aadhaar Linking applicable:

1. All Individuals who hold PAN as on 01^st July’2017
2. Existing Aadhaar Holders who has obtained PAN as on 01^st July’2017
3. Exemptions :

• A non-resident as per the Income-tax Act, 1961;
• Individual of the age of 80 years or more at any time during the previous year;
• Individual who is not a citizen of India

Individual – residing in the States of Assam, Jammu and Kashmir and Meghalaya;

Modes to Link PAN with Aadhaar:

1. By sending SMS (or)

<<SMS to 567678 or 56161: UIDPAN 111122223333 AAAPA9999Q>>

2. By Logging in to E-Filing Portal (or)

• By direct login into the e-filing portal by clicking the link provided ( Key in PAN Number & Aadhaar Number) https://www1.incometaxindiaefiling.gov.in/e-FilingGS/Services/LinkAadhaarHome.html
• By Login in the e-filing portal using registered username and password and by entering the required details under >Profile settings under the tab > LINK Aadhaar.

3. By visiting designated PAN Service Centre

Consequences of Not Linking PAN with Aadhaar:

• PAN will become inoperative w.e.f 01^st July’2020
• Attract higher rate of tax deduction on income earned due to inoperative PAN since it deemed as not holding a valid PAN.
• Attract Penalty of Rs.10,000/- for having Invalid or Inoperative PAN card u/s.272B of Income Tax Act, 1961.
• Income Tax Return Filing Due date for FY 2019-20 is approaching & individuals cannot file the income tax return without valid PAN.
• Due to no clarity issued as on date, whether Aadhaar number can be used as per PAN –Aadhaar Interchangeability rules to do 18 specific financial transactions for which quoting PAN is mandatory, once PAN has become inoperative due to Non linking.
• Penalty Rs.10,000/- for holding Multiple PAN Numbers. (E.g) If the existing PAN become inoperative due to Non-Linking and If a person does not have Valid /PAN and quote the Aadhaar number for carrying out specific financial transactions or for filing Income tax returns, the Department will automatically allocate a PAN as if deemed to have made an application for PAN.

Since there is very less probability of any further extension based on above statistics of multiple extension and rule notified on 13.02.2020 for the Manner of making permanent account number inoperative” (Rule 114AA), it is highly recommended the PAN Cardholders should link their PAN with Aadhaar on or before the 30.06.2020 without fail.

If a person misses the deadline for linking, his/her PAN card will become inoperative from July 1, 2020. However, it will again become operative once the individual links the PAN with the Aadhaar card as per manner & format prescribed (this is to be notified by CBDT in due course).

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