The income tax department on Friday issued a clarification on Aadhaar-Permanent Account Number (PAN) linking. According to this, individuals who have paid their penalty for linking the two and consent has been received but linking is not done till June 30, 2023, then such cases will be considered by the income tax department before making the PAN inoperative.
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It is important to note that if PAN is not linked by Aadhaar by June 30, 2023, then PAN will become inoperative. This would mean that an individual will not have a valid PAN wherever quoting of same is mandatory.
The tax department further mentioned that instances have come to notice where PAN holders have faced difficulty in downloading the challan after payment of fee for Aadhaar-PAN linking.
"In this regard, it is to be informed that status of challan payment may be checked in ‘e-pay tax’ tab of portal after login. If a payment is successful, then PAN holder can proceed to link PAN with Aadhaar," it said on its official Twitter handle.
It must be noted that the income tax law to link Aadhaar and PAN came into effect from July 1, 2017. Since then the deadline to link the two has been extended many times, the last of which ended on June 30.
As of now, it is understood that if both are not seeded, PAN would become inoperative from July 1, 2023. As per Income-tax Act, 1961, it is mandatory for all PAN holders, who do not fall under the exempt category, to link their PAN with Aadhaar.
Users should note that while income tax returns can be filed even without linking the two, the department does not process the returns until PAN and Aadhaar are linked. This will also lead to an individual’s KYC being incomplete as a PAN card is one of the necessary documents required for the completion of KYC. This will, in turn, impact one's bank account savings.
Additionally, if the individual earns interest on savings above Rs 10,000, then the tax deducted at source (TDS) rate levied will be 20 percent as TDS levied on a bank account without a PAN card is doubled.
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