The Permanent Account Number (PAN) card and Aadhaar card are critical identification documents for Indian citizens. The Income Tax (IT) department issues the PAN card, while the Unique Identification Authority of India (UIDAI) issues the Aadhaar card.
PAN is a unique identification number issued to individuals and businesses for tax purposes. The Aadhaar number is a 12-digit unique identification number issued for all residents. However, the IT department has made linking PAN and Aadhaar cards mandatory.
Section 139AA This section mandates that linking of PAN with Aadhar is mandatory for all taxpayers to provide the Aadhar card details when filing their income tax returns.
The IT department issued a circular that it is mandatory for all PAN-holders (except those who fall under the exempt category) to link their PAN-Aadhaar within 30th June 2023. Initially, the IT department mandated to link PAN-Aadhaar by 31st March 2022 and then extended it to 30th June 2022. However, people who linked their PAN-Aadhaar between 1st July 2022 to 30th June 2022 had to pay a fine of Rs.500.
Subsequently, the IT department extended the last date to link PAN-Aadhaar to 30th June 2023. PAN holders who link PAN-Aadhaar between 1st July 2022 to 30th June 2023 must pay a penalty of Rs.1,000. PAN card will become inoperative from 01st July 2023 if PAN holders do not link it with their Aadhaar card. The IT department has mandated linking PAN-Aadhaar to regulate and curb tax evasion.
If you still have not linked the PAN-Aadhaar. Your PAN status will be shown as Active but inoperative and your service recipients will be doing higher tax deductions. No need to worry, you can still link them by paying a fine of Rs.1000, within 7-10 days your PAN status will be Active and operative and you will have all your TDS credits showing in your Form 26AS and you can rightly claim them while filing taxes.
The exempt category people need not link PAN-Aadhaar within 30th June 2023. The exempt category is as follows:
The last date for PAN-Aadhaar linking is 30th June 2023. PAN cards not linked with Aadhaar will become inoperative after 1st July 2023.
Methods of linking Aadhar Number with PAN
Aadhar number can be linked in Two ways :
1.Through SMS facility
2 Through logging into e-filing portal http:/www.incometax.gov.in/iec/foportal
When the PAN-Aadhaar cards are not linked within the last date, it becomes inoperative as a result of which:
However, the PAN can be made operative again in 30 days, upon intimation of Aadhaar number to the prescribed authority after payment of fee of Rs.1,000.
The taxpayers who have not linked their PAN-Aadhaar within the last date of 30th June 2023, can do so by paying a late penalty of Rs.1,000. They must pay the penalty before filing for the PAN-Aadhaar link on the Income Tax website. However, they need to ensure they have a valid PAN number and Aadhaar number to pay the penalty.
When the PAN card is not linked with the Aadhaar card, it becomes inoperative. However, individuals can re-activate their PAN card by paying the penalty for non-linking PAN with an Aadhaar card.
Follow the below steps to pay the penalty for re-activating an inoperative PAN card:
Step 1: Visit the Income Tax e-Filing Portal.
Step 2: Click the ‘e-Pay Tax’ option under the ‘Quick Links’ heading.
Step 3: Enter the ‘PAN’ number under ‘PAN/TAN’ and ‘Confirm PAN/TAN’ column, enter mobile number and click the ‘Continue’ button.
Step 4: After OTP verification, it will be redirected to e-Pay Tax page. Click the ‘Continue’ button.
Step 5: Click the ‘Proceed’ button under the ‘Income Tax’ tab.
Step 6: Select Assessment Year as ‘2024-25’ and ‘Type of Payment (Minor Head)’ as ‘Other Receipts (500)’ and select ‘Fee for delay in linking PAN with Aadhar’ and click the ‘Continue’ button.
Step 7: The applicable amount will be pre-filled against ‘Others’ option. Click ‘Continue’ button and make the payment.
You can pay the late penalty on Income Tax e-filing Portal through net banking, debit card, over the counter, NEFT/RTGS or payment gateway option. However, you can pay the penalty through the payment gateway option when you have a bank account with the following authorised banks:
After making the payment, proceed to link your PAN with Aadhaar card.
Taxpayers can link their PAN with their Aadhaar after four to five days of paying the penalty by following the steps below:
Step 1: Go to the Income Tax e-filing portal.
Step 2: Under the ‘Quick Links’ heading on the left-hand side of the homepage, click on the ‘Link Aadhaar’ option.
Step 3: Enter the ‘PAN’ and ‘Aadhaar Number’ and click the ‘Validate’ button.
Step 4: A pop-up message stating ‘Your payment details are verified’ will appear when the penalty payment has been verified. Click the ‘Continue’ button to submit the linking request.
Step 5: Enter the required details and click the ‘Link Aadhaar’ button.
Step 6: Enter the OTP received on the mobile number.
Step 7: The request to link the PAN-Aadhaar card will be successfully submitted.
A taxpayer can also visit a PAN card centre, fill out the appropriate form and submit it with photocopies of PAN and Aadhaar cards for PAN-Aadhaar linking.
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PAN and Aadhaar cards are essential for Indian citizens, with the IT department issuing PAN and UIDAI issuing Aadhaar. Linking PAN-Aadhaar is mandatory for taxpayers by June 30, 2023, with penalties for late linking. Inoperative PAN cards lead to consequences like higher TDS rates and restrictions on transactions. Users can pay penalties to activate inoperative PAN cards and link them to Aadhaar. The linking process and payment can be done through the Income Tax e-filing portal.