Aadhaar-PAN linking last day today — Will India extend the deadline again

"The requirement was brought about to eliminate instances of individuals having multiple PANs and help in greater tax rationalization. Right incentives are necessary to drive compliance by bringing about the right behavioral changes. Negative incentivization measures such as penalties for delays in linking such as late fee or extra surcharge, will help bring in greater compliance," Iyer told CNBC-TV18.com.

The government has, however, extended this deadline at several occasions.

Additionally, Amit Gupta, managing director at SAG Infotech said in a News 18 report that government should consider an extension of the Aadhaar-PAN linking deadline to align with income tax return (ITR) filing time.

"Lack of awareness, technical difficulties and logistical challenges may also merit the need for an extension for improved compliance," Gupta was quoted as saying in the report.

Notably, the last day to file ITR for financial year FY2022-23 is July 31, 2023.

It must also be noted that Indian government has issued more than 610 million PAN cards, while the number of PAN cards successfully linked with Aadhaar stands at only 480 million, according to recent data released by the Central Board of Direct Taxes, as of February 2023.

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.