PAN Aadhaar Link Penalty: What Happens If Pan Card Is Not Linked To Aadhaar Card?
Updated: Aug 13
The Indian government has made the linking of the Unique ID Card, or Aadhaar, with the Permanent Account Number a mandatory requirement to bring more transparency into all financial dealings and eliminate the possibility of tax evasion. This is a detailed article about the consequences of not linking Aadhaar and PAN.
Table of Contents
It further goes on to add that a PAN unlinked with Aadhaar could get deactivated. This will result in higher taxation, penalties, and problems for the persons in financial transactions. The article presents advantages to the government and people through this linking exercise, sets out a step-by-step procedure for linking Aadhaar with PAN before the deadline of June 30, 2023, and describes exemptions for particular categories. Also, it explains the penalty for failing to link the same, thus making it comprehensive information about this important financial requirement.
What is the Meaning of PAN Aadhaar Link?
According to the mandate of the Indian government, every resident shall link Aadhaar with PAN, except NRIs, non-citizens, those above the age of 80 years, and residents of the exempted areas. This is basically a policy move aimed at helping avoid tax evasion by giving each taxpayer a unique identity. Non-linking of PAN and Aadhaar can impact financial transactions related to daily life and may impact access to governmental facilities.
PAN is the unique tax identity number issued by the Income Tax Department to individual taxpayers and becomes necessary for filing income tax returns as well as a whole lot of other activities like opening bank accounts, making real estate investments, purchasing jewelry, applying for loans, or creating Demat accounts.
The UIDAI brought forth the Aadhaar card that would give every Indian a unique identification number. It identifies persons through their biometric data and hence is more secure.
Consequence of Not Linking PAN with Aadhaar
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.
PAN Aadhaar Link: Section 234H Penalties
In the event that an individual doesn't connect their PAN and Aadhaar by the deadline, they might be given a punishment of ₹1,000 for failing to connect their PAN and Aadhaar.
Non-filing of pay returns would bring about a punishment of ₹ 10,000.
Formerly, there was a Rs. 500 fee to connect PAN to Aadhaar. As of right now, taxpayers must connect their PAN to Aadhaar by June 30, 2023, or face a ₹ 1,000 late fee. As a result, before registering for the PAN-Aadhaar link on the Income Tax website, they must pay the penalty. To pay the fine, they must, however, make sure they have a working PAN, Aadhaar, and cellphone number.
To pay the fine for connecting your PAN and Aadhaar numbers, do the following actions:
Step 1: Go to the e-filing Portal for Income Tax.
Step 2: Navigate to the “Quick Links” page and click on “e-Pay Tax”.
Step 3: Enter the “PAN” in the “PAN / TAN column” then enter the “MOBILE NO” in the “confirm PAN / TAN” column.
Step 4: The e-Pay Tax page will be shown when the OTP has been verified. Select "Continue" from the menu.
Step 5: Click on “Income Tax” followed by the Proceed”.
Step 6: In “type of payment (Minor head) select “Other receipts (500)”, and for Assessment year, select “2023 – 2024”. then, select “Continue” on the menu.
Step 7: Using the "Others" option, the appropriate amount will be pre-filled. After selecting "Continue," complete the payment.
You can make this late payment through net banking, debits cards, In-person, NEFT/RTGS and payment gateway on the IT e-filing Portal. However, if you have a bank account with one of the following approved banks, you may use the payment gateway option to pay the penalty:
Axis Bank
Bank of Baroda
Bank of India
Bank of Maharashtra
Canara Bank
Central Bank of India
City Union Bank
Federal Bank
HDFC Bank
ICICI Bank
IDBI Bank
Indian Bank
Indian Overseas Bank
IndusInd Bank
Jammu & Kashmir Bank
Karur Vysya Bank
Kotak Mahindra Bank
Punjab & Sind Bank
Punjab National Bank
RBL Bank
South Indian Bank
State Bank of India
UCO Bank
Union Bank of India
As soon as the payment has been made, connect your PAN and Aadhar card.
Who is in the Exempt Category from linking their PAN to Aadhaar?
This has nothing to do with some particular groups of people.
Those age eighty or older.
In other words, under the Income-tax act, non-resident
An individual who is not an Indian citizen.
What advantages come with connecting PAN and Aadhaar?
What are the government's gains from it?
A lot of "black money" keeps moving around in the economy because audit trails are lost. The link between PAN and Aadhaar makes it easier for the government to keep track of audit logs for transactions. These days, you need an Aadhaar card for almost everything. By tying it to PAN, the IT staff can see a full record of all activities, prevent unnecessary PAN Aadhar Link Penalty and find money leaks quickly.
Compared to PAN cards, Aadhaar cards cover a greater population. Therefore, connecting them would guarantee that more individuals fall inside the tax net and allow the government to deter tax fraud.
The procedure of Aadhaar-PAN linkage would deter people from having numerous PAN or Aadhaar cards for the purpose of tax avoidance.
What advantages does it provide for taxpayers?
With the Aadhaar-PAN connection, truthful taxpayers nationwide who have been paying their taxes on time while others have escaped tax burden should anticipate equitable treatment when it comes to taxes. This will enable the IT department to decrease tax rates for honest taxpayers while also expanding its tax net.
Since the Aadhaar-PAN linkage would do away with the laborious task of forwarding ITR receipts to the IT department, it will also expedite the filing of IT returns. IT returns will no longer need e-signature authentication thanks to Aadhaar e-verification.
Following the Aadhaar and PAN connection, taxpayers will also have access to an overview of all their IT transactions by logging in to the IT website using their login credentials.
How is Aadhaar connected to PAN?
Using the E-filing Portal
Without using the Income Tax E-filing site to log in
The first step is to choose the "Link Aadhar" option located under the "Our Services" heading on the e-filing webpage.
After that, he or she must input all of the necessary information without fail. After selecting the checkboxes next to the relevant terms and conditions, press the "Link Aadhar'' button.
The registered cellphone number will get an instant 6-digit OTP that must be input for verification.
Either manually input the information and click the "Validate" button, or the form will be read automatically.
It's crucial to be aware that the OTP may only be entered three times and has a 15-minute validity window. When the OTP expires, it will be shown by the countdown timer on the screen.
Should the OTP fail to transmit, try again by selecting the "Resend OTP" option.
Once the OTP has been entered and submitted successfully, the linking is finished.
After Entering the E-filing Site
After entering your password and user ID, click "Continue."
Then, there will be an option labeled "Link Aadhar to PAN" on the e-filing dashboard, along with a matching "link" option. Press the same button.
Instead, the “My Profile” menu on the top-right corner of the screen which has the drop-down includes the “Aadhaar.”
Subsequently, please submit all requisite details such as name, date of birth, gender and Aadhar Number. Click on Link AADHAAR once you have ticked against the appropriate terms and conditions. This concludes the connection process.
Through the SMS Service
Manually link Aadhaar and PAN by completing Form (Annexure 1)
People may now connect their PAN and Aadhaar via the manual way, according to CBDT. If there is a discrepancy between the PAN and Aadhaar data and it is impossible to connect the two via an online or SMS approach, this technique may be employed.
You must physically connect your Aadhaar and PAN by visiting a PAN, NSDL, or UTIITSL service center and filling out Annexure-1 with copies of your Aadhaar and PAN. In the event that Aadhaar or PAN needs to be corrected, you will have to pay the appropriate charge. The fees for Aadhaar and PAN corrections are Rs 25 and Rs 110, respectively.
How can you tell whether your PAN and Aadhaar are connected?
By visiting the "Link Aadhar status" page under the "Our Services" heading, one may examine the Link Aadhar Status Pre-login. After providing the PAN and Aadhar number, the see link status button has to be clicked.
Finding the "Link Aadhar to PAN" and choosing the "Link Aadhar Status" option that is next to it would allow one to examine Link Aadhar Status after logging in. After that, the Link Aadhar status will be shown.
What is the Current government deadline for linking Aadhaar PANs?
The Government of India has announced that the deadline for connecting Aadhaar and PAN is June 30, 2023.
Conclusion
This can be concluded by saying that the compulsory linking of Aadhaar and PAN is one of the measures the Indian government has taken to make financial transactions easier, suppress tax avoidance, and increase traceability. It is, therefore, very important that the linking of the identifiers is done before the deadline elapses on June 30, 2023. Failure to link may entail adverse consequences in terms of penalties, higher taxes, and reduced rebates on monetary transactions. However, the exemptions are granted to people above 80 years old, non-resident and non-citizen. This linking helps the government fight tax evasion, broadening of base, fair deal to honest tax payers and simplifying procedures.
A financial identity is required in order to stay informed, dodge penalties, and benefit from being connected. Ensure you are responsible for your tax duties, as TaxBuddy helps you navigate through the winding taxation pathways and implications of PAN Aadhaar Link Penalty.
FAQs
1. If I miss the deadline, can I still connect my PAN to my Aadhaar?
It is still possible to connect your PAN and Aadhaar even if the June 30, 2023 deadline passes. However, if you miss the deadline, your PAN card will stop working. It must be connected to the Aadhaar number before it can be turned on. If PAN-Aadhaar is linked after the deadline, there is a ₹1,000 fine.
2. How long is the validity of a PAN card?
The PAN (Permanent Account Number) card given by India's Income Tax Department is valid for life. Unlike other forms of identification, such as Aadhar cards, changes in the cardholder's address do not impact the validity of the PAN card. As a result, once received, the PAN card serves as a permanent and lasting identifying document for the duration of an individual's life.
3. Who is not required to connect their PAN with Aadhaar?
The linking of PAN with Aadhaar is not required for non-residents, those over 80 years old, or inhabitants of the states of Assam, Jammu & Kashmir, or Meghalaya.
4. Is there paperwork needed to connect Aadhaar and PAN?
There are no paperwork requirements for linking PAN with Aadhaar. Entering the PAN and Aadhaar numbers on the IT website by clicking on the appropriate link is a pretty easy procedure.
5. Even if my name appears differently on Aadhaar and PAN, can I still connect them?
Before connecting the two papers, you must start the name change procedure for either one if your name appears differently on your PAN card or Aadhaar card.
6. Do Super elderly citizens need to get an Aadhaar card?
Nope. Super elderly persons are not required to connect their PAN to Aadhaar; they must be at least 80 years old. Therefore, even if they haven't connected their PAN card to an Aadhar card, it will stop working on July 1, 2023.
7. Is Aadhaar PAN linkage free of charge?
You must bring your PAN, Aadhaar, and a fee paid (of Rs.1000/) challan copy to the center and use the service after paying the required biometric authentication fee. Protean/UTIITSL websites may be consulted for information on authorized Service Providers for biometric authentication.
8. What should I do if my PAN stops working?
These implications of an inoperative PAN will take effect on July 1, 2023, and will last until the PAN becomes operational. A cost of one thousand rupees would continue to be charged to activate the PAN by informing the Aadhaar number.
For further details, please see Circular No. 03 of 2023, issued March 28, 2023.
9. How long does connecting a PAN to an Aadhaar take?
The time it takes to connect a PAN and an Aadhaar card depends on a number of variables, including the volume of applications, the quality of the information, and the effectiveness of the verification process. While it usually takes 5 to 10 working days, it is crucial to remember that specific circumstances may vary.
10. How many PAN cards are associated with Aadhar?
In India, there are 70.24 crore PAN card holders, with 57.25 crore having their PAN cards linked to Aadhaar. According to the RTI response, over 12 crore PAN cards have not been connected with Aadhaar, with 11.5 crore cards deleted.
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Thank you, TaxBuddy, for this insightful breakdown on the PAN-Aadhaar linking process and its penalties. This is incredibly helpful in understanding the serious implications of non-compliance. A special shout-out to CashKendra for bringing such valuable resources to our attention, helping individuals stay informed about important financial compliance matters. Your efforts are truly appreciated!"
Thank you, Bhavika Rajput, for your invaluable insights on navigating the complexities of tax laws! Your blog posts are a goldmine of practical advice, making tax regulations much more approachable. Your expertise truly shines through, providing readers with clear guidance on managing finances effectively. JustPayOn is fortunate to feature such insightful content that keeps us informed and compliant in this dynamic financial landscape. Looking forward to your continued updates and wisdom!"