- If you are not linking Permanent Account Number (PAN) with Aadhaar card by the March 31 deadline, you will be liable to pay a fine
- If not linking Pan card with Aadhar, an individual’s PAN will also become invalid.
- individuals will not be able to file income tax and face a higher penalty for non-compliance
Individuals need to link their PAN with Aadhaar card by March 31 to avoid some serious penalties. Here is all you need to know:
A permanent account number(PAN), is a unique 10-digit alphanumeric identity allotted to each taxpayer by the Income Tax Department under the supervision of the Central Board of Direct Taxes.
PAN card also serves as identity proof for individuals. PAN is also mandatory for financial transactions such as receiving taxable salary or professional fees, sale or purchase of assets above specified limits, buy mutual funds, and more.
But keeping this PAN card active and use for your financial transaction, March 31, 2021 is a important date for you.
“If you are not linking Permanent Account Number (PAN) with Aadhaar card by the March 31 deadline your PAN will also become invalid”
If you are not linking Permanent Account Number (PAN) with Aadhaar card by the March 31 deadline, it may cost you. You will not only be liable to pay a fine of up to Rs 1,000 but your PAN will also become invalid.
This is part of a new amendment introduced in the Finance Bill, 2021 passed by the Lok Sabha on Tuesday 23, March 2021.
“The government inserted a new section (Section 234H) into the Income Tax Act, 1961 for penalising individuals who do not link PAN with the Aadhaar card by March 31, 2021”
While passing the Finance Bill, 2021, the government inserted a new section (Section 234H) into the Income Tax Act, 1961 for penalising individuals who do not link PAN with the Aadhaar card by March 31, 2021.
The penalty amount could be lower than Rs 1,000 but it will not be higher, as per the law. The government will specify the amount of penalty that will be levied from individuals who fail to link PAN and Aadhaar card within the specified deadline.
Other than the fine, an individual’s PAN will also become inoperative. In such a situation, an individual will not be able to conduct financial transactions where quoting PAN is necessary.
“The government will not give any more extensions and wants to penalise those who fail to complete the process.”
The government has given several extensions to link PAN with Aadhaar card in the past. However, it is unlikely to give any more extensions and wants to penalise those who fail to complete the process.
Individuals will not be able to file income tax and face a higher penalty for non-compliance
An invalid PAN will cause bigger problems as individuals will not be able to file income tax and face a higher penalty for non-compliance. It may be noted that it is mandatory for each person to quote Aadhaar card number in their income tax return and in the application for PAN allotment.
Tax experts said an inoperative PAN could also lead to a higher rate of tax deducted at source (TDS). Under the Income Tax Act, a person who does not furnish a PAN or gives details of inoperative PAN will have to pay higher TDS or TCS.
If you want to know details that how to link your Pan card with Aadhar you can Also read Link PAN card with Aadhaar before March 31, 2021: Know how to apply