Since July 1, 2017, the implementation of the income tax law requiring the linkage of PAN with Aadhaar has been in effect. Since then, the deadline for linking PAN card to Aadhaar card has been extended on multiple occasions. The government has laid emphasis on making the PAN-Aadhaar linking important as it is a measure to streamline the tax payment process and also minimize tax evasion.
According to a circular issued in March 2022 by the Central Board of Direct Taxes, the Income Tax Act announces that it is mandatory for every person who has been allotted a PAN as on July 1, 2017, to convey their Aadhaar Number in order to link their PAN and Aadhaar card.
PAN holders who link PAN-Aadhaar from 1st July 2022 to 30th June 2023 had to pay a penalty of Rs.1000 as it was the last day for linking PAN with biometric Aadhaar. The taxpayers who did not get their Aadhar and PAN linked by this date will not be able to avail of certain benefits related to income tax.
The PAN card of those who did not link it with Aadhaar till July 1, 2023, will become inoperative and the TCS (Tax Collected at Source) and the TDS (Tax Deducted at Source) will be charged at a higher rate.
The Act that makes it necessary for all PAN holders except those who fall under the exempt category to link their PAN with their Aadhaar is the Income Tax Act, of 1961.
After the payment of the penalty, the taxpayer will be able to activate their PAN. This process of payment of penalty can be done on the portal of NSDL (National Security Depository Limited) by paying the amount under Challan No. ITNS 280 with major head 0021 (Income Tax Other Companies) and Minor head 500 (Other Receipts).
The filing of income tax returns can still be done without linking PAN with biometric Aadhaar, but the department will not process your return until the two are linked.
For PAN holders who have encountered challenges in downloading their challan following the payment of fees for Aadhaar-PAN linking, a notice has been issued. The notice states that the status of the challan payment can be verified by accessing the ‘e-pay tax' tab on the portal after logging in. If the payment is successful, the PAN holder can further proceed to link their PAN with Aadhaar.
It also said that in case the fee payment and consent for linking the PAN-Aadhaar has been done but not done till 30th June, the department will duly consider these cases.
