The Indian government wants to make finances clearer and stop people from not paying their taxes, so they have made it mandatory to link Aadhaar (the unique ID card) with PAN (the permanent account number). This detailed guide goes into great depth about what happens if you don't link your Aadhaar and PAN.
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It explains how an unlinked PAN might stop working, which could mean higher taxes, fines, and problems with financial transactions. The piece also talks about the benefits for both the government and people and shows how to connect Aadhaar to PAN before the government deadline of June 30, 2023. Exemptions for certain groups are also explained, along with the consequences of not following the rules. This gives a complete picture of this important financial requirement.
Understanding PAN and Aadhar Card?
The Indian government has made it mandatory for everyone to connect their PAN (Permanent Account Number) to their Aadhaar, with certain exceptions for NRIs, non-citizens, those over 80, and people living in particular areas. By giving each taxpayer a distinct identification, this policy seeks to reduce tax evasion. Financial transactions and government services may be impacted by the failure to connect PAN and Aadhaar, among other effects.
The nation's Income Tax Department issues PANs, or Permanent Account Numbers, to individual taxpayers as a special tax identity number. It is a fundamental document for finishing income tax returns as well as different errands like laying out a ledger, making land ventures, purchasing jewelry, applying for a new line of loan, making a Demat account, and so on.
The UIDAI started the Aadhaar card a couple of years prior with the end goal of furnishing every single Indian with a special recognizable identity card or number. It is considered a more secure personal identity document since it uses biometrics.
If You Do Not Connect Your Aadhaar and PAN, What Would Happen?
If you don't complete the PAN Card and Aadhar card connection by the deadline, you will have to deal with the following consequences:
PAN Card stops functioning
A person's PAN will stop working if they fail to connect it to Aadhaar by the deadline. It won't be feasible to provide, disclose, or quote the PAN number anyplace once it stops working. This might also lead to:
Applying a higher tax rate on income taxes
Increased TDS gathering
Inability to complete income tax forms, which may result in additional interest charges, fines, and legal ramifications if information about earned income is withheld.
Penalties for failing to quote PAN in certain banking transactions
Interchangeability of PAN and AADHAAR is prohibited
The Income-tax Act says that Aadhaar and PAN can be used instead of each other if they are linked. This means that you can use either PAN or Aadhaar, based on the situation. But these numbers can't be used in place of each other if they're not linked.
Furthermore, no one would be able to cite Aadhaar instead of PAN or vice versa since PAN will become inoperative in the event of non-linking to Aadhaar.