Cody Casey
The Indian government has made it mandatory for all individuals to link their Aadhaar Card with their PAN Card for filing their Income Tax Return (ITR). However, there are certain exemptions to this rule, including for individuals residing in the states of Assam, Jammu and Kashmir, and Meghalaya, as well as non-residents and individuals aged 80 years or above. It is important to note that the consequences of not linking PAN with Aadhaar include the PAN becoming inoperative, which can lead to issues with tax refunds and higher tax deduction or collection rates. Despite these consequences, it is still possible to file an ITR without linking the two, although verification methods may differ.
| Characteristics | Values |
|---|---|
| Is it mandatory to link Aadhaar with PAN? | Yes, it is mandatory to link Aadhaar with PAN for filing an Income Tax Return. |
| Deadline for linking Aadhaar with PAN | 30 June 2023 |
| Consequences of not linking Aadhaar with PAN | PAN will become inoperative. |
| Can you file ITR with an inoperative PAN? | Yes, you can file ITR even if your PAN is inoperative. |
| Can you file ITR without linking Aadhaar with PAN? | Yes, but you may not be able to verify your ITR using Aadhaar OTP. |
| Can you file ITR without linking Aadhaar with PAN and with an inoperative PAN? | Yes, but you may not be able to claim a refund or interest on any refunds. |
| Who is exempt from linking Aadhaar with PAN? | Individuals residing in Jammu and Kashmir, Assam, and Meghalaya, non-residents, individuals aged 80 years or above, and foreign nationals residing in India. |
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What You'll Learn
Deadlines for linking Aadhaar and PAN
The last date to link PAN with Aadhaar was initially 31 March 2022. This deadline was then extended to 30 June 2023, with a late fee of Rs. 1,000 applicable for those who linked their PAN with Aadhaar after this date. The deadline was extended once more to 31 May 2024, with the same late fee of Rs. 1,000 for those who linked their PAN with Aadhaar after this date.
If an individual does not link their PAN with Aadhaar, their PAN will become inoperative. This means that the individual will not be able to use their PAN in situations where it is necessary, such as when opening bank accounts, investing in fixed deposits, or engaging in mutual funds.
To check if your PAN is linked with Aadhaar, you can send an SMS in the following format: "UIDPAN <12-digit Aadhaar number> <10-digit PAN number>" to either 567678 or 56161. Alternatively, you can visit the e-filing portal and click on "Link Aadhaar" under the "Quick Links" section. Enter your PAN and Aadhaar details and select "View Link Aadhaar Status". If your PAN is linked with Aadhaar, a pop-up will appear on your screen confirming the same.
If your PAN is not linked with Aadhaar, you can follow the steps outlined on the e-filing portal to link the two. The process involves entering your PAN and Aadhaar details, paying the late fee, and verifying your information. Once the process is complete, your PAN will be linked with Aadhaar and will become operative.
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Exemptions from linking Aadhaar and PAN
Aadhaar-PAN linkage is not mandatory for individuals in the following categories:
- Individuals residing in the states of Jammu and Kashmir, Assam, and Meghalaya.
- Non-residents as per the Income Tax Act, 1961.
- Individuals aged 80 years or above at any time during the previous year.
The exemptions provided are subject to modifications depending on subsequent government notifications. Individuals in the above categories who still wish to link their Aadhaar with their PAN will be required to pay a specified fee.
It is important to note that while ITR filings can be completed without linking Aadhaar and PAN, there are consequences to having an inoperative PAN. These include higher taxation, penalties, and issues with financial transactions. The Income Tax Department has reminded taxpayers to ensure the linking of their PAN with Aadhaar before the specified deadline to avoid any adverse effects on their ITR filings.
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Consequences of not linking Aadhaar and PAN
The Income Tax Department has set a deadline of May 31, 2024, for taxpayers to link their Permanent Account Number (PAN) with Aadhaar. Failing to do so by this deadline will result in the PAN becoming inoperative, leading to several consequences.
Firstly, taxpayers with an inoperative PAN may face difficulties in financial transactions and be unable to open a bank account, issue debit or credit cards, purchase mutual fund units, or make cash deposits exceeding Rs.50,000 per day.
Secondly, the inoperative PAN will result in tax deductions and collections at a higher rate. The Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) will be twice the usual rate, impacting the taxpayer's refund amount.
Thirdly, the PAN card will not be accepted for obtaining government services, such as applying for a passport, obtaining subsidies, or opening a bank account. This may cause significant inconveniences for individuals who need to access these services.
Additionally, an inoperative PAN may lead to challenges in filing income tax returns (ITRs). While some sources indicate that ITRs can still be filed without linking PAN and Aadhaar, verification of the ITR may be more complex and require alternative methods such as sending a signed copy of ITR-V to the relevant authorities.
It is important to note that individuals residing in the states of Jammu and Kashmir, Assam, and Meghalaya, as well as non-resident taxable persons and super senior citizens above 80 years of age, are exempt from the requirement to link their PAN and Aadhaar. However, for those who are required to link the two, failing to do so by the deadline will result in these consequences, impacting their financial transactions, tax deductions, and access to government services.
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How to link Aadhaar and PAN
It is important to note that while linking Aadhaar and PAN is mandatory for all Indian citizens, it is not mandatory for individuals in certain categories, including those residing in Jammu and Kashmir, Assam, and Meghalaya, non-residents as per the Income Tax Act, 1961, and individuals aged 80 years or above. For those who are required to link their Aadhaar and PAN, here is a step-by-step guide on how to do so:
Step 1: Visit the Official Income Tax Department Website
Go to the official website of the Income Tax Department. On the homepage, look for the “Link Aadhaar” option under the Quick Links section. This option may be available without the need to log in.
Step 2: Enter Your PAN and Aadhaar Numbers
Enter your PAN and Aadhaar numbers accurately in the designated fields. Make sure that the details match the information on your PAN and Aadhaar cards.
Step 3: Enter Additional Information
Provide your name as per your Aadhaar card and your registered mobile number. Ensure that this information is correct and up-to-date.
Step 4: Validate and Submit the Request
Click on the “Validate” or “Link Aadhaar” button. An OTP will be sent to your registered mobile number. Enter the OTP and validate it to submit your linking request.
Step 5: Wait for Verification and Processing
Once the OTP is verified, your Aadhaar-PAN linking request will be submitted for verification. This request will be sent to the UIDAI for validation. The processing time for the reactivation of your PAN card may vary, ranging from 7 to 30 days from the date of submission of the request.
Penalty for Late Linking
It is important to be mindful of the deadlines and penalties associated with linking Aadhaar and PAN. While the initial deadline was June 30, 2023, the government extended the deadline to May 31, 2024, with a late fee of ₹1,000 for linking after this date. This late fee must be paid on the Income Tax e-filing portal before submitting the linking request.
Biometric-Based Authentication
If you encounter issues with linking your Aadhaar and PAN, you may need to utilise biometric-based authentication at specialised centres operated by PAN Service Providers (Protean and UTIITSL). This process may require a fee of ₹1000 and relevant documentation, including your PAN, Aadhaar, and a copy of the fee-paid challan.
By following these steps and staying informed about any updates or changes, you can successfully link your Aadhaar and PAN and avoid any potential repercussions or penalties.
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Filing ITR with an inoperative PAN
The Income Tax Department has clarified that an inoperative PAN is not an inactive PAN, and individuals can file their Income Tax Return (ITR) even if their PAN is not linked with Aadhaar or if the PAN is inoperative. The deadline for linking PAN with Aadhaar was initially set as 30 June 2023, but it has since been extended to 31 May 2024.
If you have an inoperative PAN, you can still file your ITR, but there will be consequences, including:
- Pending refunds and interest on such refunds will not be issued.
- Higher tax deduction at source (TDS) and higher tax collection at source (TCS).
The ITR e-filing portal does not require individuals to link their PAN with Aadhaar at the time of filing ITR. Additionally, there is no difference in the process of filing ITR even if the PAN is inoperative. However, it is important to note that the filed ITR cannot be verified using the Aadhaar OTP. Alternative verification methods, such as sending a signed copy of ITR-V to CPC, Bangalore, or generating EVC through net banking or ATM, must be used instead.
To link your PAN with Aadhaar, follow these steps:
- Ensure that the details in your PAN and Aadhaar databases match. Update your name, if necessary, by contacting Protean or UTIITSL for PAN and UIDAI for Aadhaar.
- Utilize the quick link "Link Aadhaar" on the e-Filing homepage to link your PAN and Aadhaar.
- If the linking request fails, opt for biometric-based authentication at dedicated centres operated by PAN Service Providers (Protean and UTIITSL). Carry your PAN, Aadhaar, and a copy of the fee-paid challan (Rs. 1000) to avail of this service.
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Frequently asked questions
Yes, you can file ITR without linking Aadhaar with PAN. However, your PAN will become inoperative if you do not link it with Aadhaar by the prescribed date.
The deadline for linking PAN with Aadhaar was 30 June 2023. If you have not linked your PAN with Aadhaar by this date, your PAN will become inoperative.
If your PAN is inoperative, you will not be able to claim a refund or interest on any refunds. Additionally, you may be subject to higher tax deduction or collection rates.
To link your PAN with Aadhaar, you can visit the e-filing portal and click on the "Link Aadhaar" option. You will need to enter your PAN and Aadhaar numbers, as well as some other personal details.
