As the last date for linking PAN with Aadhaar approaches tomorrow, the Income Tax Department on Wednesday said non-linking of PAN with Aadhaar by March 31 would attract penalty of up to Rs 1,000, but such PAN will remain functional for one more year till March 2023, for filing ITR, claiming refunds and other I-T procedures.
The Central Board of Direct Taxes (CBDT), which is the apex decision making body on direct taxes, has extended the deadline for linking Permanent Account Number (PAN) with Aadhaar many times and the last date now is March 31, 2022.
As per a fresh circular issued by CBDT, PAN which is not linked to Aadhaar would become "inoperative" after March 31, 2023. Those taxpayers who link their PAN with biometric Aadhaar by June 30, 2022, would be required to pay a late fee of Rs 500. Beyond that, the penalty would rise to Rs 1,000.
In order to mitigate the inconvenience to taxpayers, as per the notification dated March 29, 2022, a window of opportunity has been provided to taxpayers up to March 31, 2023 to intimate their Aadhaar to the prescribed authority for Aadhaar-PAN linking without facing repercussions, the CBDT said, adding such intimation would have to be accompanied by late fees.
"However, till 31st March, 2023 the PAN of the assessees who have not intimated their Aadhaar, will continue to be functional for the procedures under the Act, like furnishing of return of income, processing of refunds etc," the CBDT statement read.
Moreover, as per the rule 114AAA of the Income-tax, if PAN of a person has become inoperative, he will not be able to furnish, intimate or quote his PAN and shall be liable to all the consequences under the Act for such failure. This will have a number of implications such as:
(i) The person shall not be able to file return using the inoperative PAN
(ii) Pending returns will not be processed
(iii) Pending refunds cannot be issued to inoperative PANs
(iv) Pending proceedings as in the case of defective returns cannot be completed once the PAN is inoperative
(v) Tax will be required to be deducted at a higher rate as PAN becomes inoperative
In addition to the above, the taxpayer might face difficulty at various other fora like banks and other financial portals, as PAN is one of the important KYC criterion for all kinds of financial transactions, CBDT stated.
As per the available data, more than 43.34 crore PANs were linked with Aadhaar till January 24, 2022. Over 131 crore Aadhaar cards have been issued so far. PAN-Aadhaar linkage would help in eliminating duplicate PAN and curbing tax evasion.
Copyright©2022 Living Media India Limited. For reprint rights: Syndications Today