Tiffany Haney
Linking your PAN with your Aadhaar is a mandatory process for all PAN cardholders, irrespective of whether they pay tax or not. The process is simple and can be done online through the e-Filing Portal. For new applicants, the linking is done automatically during the application stage. However, for existing PAN holders, it is important to link the two by the specified deadline to avoid any penalties or issues with PAN card activation. The process involves registering and logging into the e-Filing Portal, entering the required details, and making any necessary payments.
| Characteristics | Values |
|---|---|
| Mandatory | Yes |
| Exemptions | Residents of Assam, Jammu and Kashmir, and Meghalaya |
| Deadline | 30 June 2023 (extended to 1 October 2024 or 31 December 2025 for those who obtained PAN card using Aadhaar enrolment ID) |
| Consequences of not linking | PAN becomes inoperative; higher TDS/TCS rate on cash withdrawals; Form 15G/H becomes ineffective; restrictions on Demat account opening, transactions, and investments in RBI and Sovereign Gold Bonds; restrictions on ISA account opening and transactions |
| Linking process | Visit e-Filing Portal; enter PAN and Aadhaar number; enter OTP; submit linking request; pay fee through e-Pay Tax |
| Unsuccessful linking | Contact Jurisdictional Assessing Officer; avail biometric authentication at dedicated centres of PAN Service Providers |
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What You'll Learn
How to link PAN with Aadhaar for new applicants
For new applicants of PAN cards, the Aadhaar PAN linking is done automatically during the application stage. This is an important process because it will allow your income tax returns to be processed. However, if you are an existing PAN holder who was allotted PAN on or before 01-07-2017, it is mandatory to link PAN with Aadhaar. If you do not link your PAN with your Aadhaar by 30 June 2023, your PAN will become inoperative.
To link your PAN with your Aadhaar, you can follow these steps:
- Visit the e-Filing Portal Home page and click on 'Link Aadhaar' in the Quick Links section. Alternatively, log in to the e-filing portal and click on 'Link Aadhaar' in the Profile section.
- Enter your PAN and Aadhaar Number.
- Click on 'Continue to Pay Through e-Pay Tax'.
- Enter your PAN, confirm PAN, and any mobile number to receive the OTP.
- After OTP verification, you will be redirected to the e-Pay Tax page.
- Click on 'Proceed' on the Income Tax tile.
- Select the relevant Assessment Year and Type of Payment as 'Other Receipts (500)'. Then, click on 'Continue'.
- The applicable amount will be pre-filled against 'Others'. Click 'Continue'. Now, a challan will be generated.
- On the next screen, select the mode of payment. After selecting the mode of payment, you will be redirected to the Bank website where you can make the payment.
- After payment of the fee, you can link your Aadhaar with PAN on the e-Filing Portal.
Aadhaar PAN link requests can be made both in Post-login and Pre-login modes. The steps for each mode are as follows:
Pre-login mode:
- Go to the e-filing Portal Home page and click on 'Link Aadhaar' under Quick Links.
- Enter the Aadhaar number and click on 'Validate'.
Post-login mode:
- Go to the e-filing Portal, log in, and on the Dashboard, click on 'Link Aadhaar to PAN' under the Profile section.
- Enter the Aadhaar number and click on 'Validate'.
In case of a Demographic Data mismatch in PAN and Aadhaar, Biometric Aadhaar Authentication is required for Aadhaar linking. You will need to visit your nearest designated PAN center for this.
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Linking PAN with Aadhaar for existing cardholders
It is mandatory to link your PAN with Aadhaar if you were allotted a PAN on or before 01-07-2017. If you do not link your PAN with the Aadhaar by 30 June 2023, your PAN will become inoperative. However, people who fall under the exempted category will not be subject to the effects of PAN becoming inoperative.
To link your PAN with Aadhaar, you can visit the website of the Income Tax Department and follow the instructions. Here are the steps to link your PAN with Aadhaar for existing cardholders:
- Visit the e-Filing Portal Home page and click on 'Link Aadhaar' in the Quick Links section. Alternatively, log in to the e-filing portal and click on 'Link Aadhaar' in the Profile section.
- Enter your PAN and Aadhaar Number.
- Click on 'Continue to Pay Through e-Pay Tax'.
- Enter your PAN, confirm PAN, and any mobile number to receive the OTP.
- After payment, enter the mandatory details as required and click on 'Link Aadhaar'.
- Enter the 6-digit OTP received on the mobile number mentioned in the previous step and click on 'Validate'.
- Your request for the link of Aadhaar has been submitted successfully, and now you can check the Aadhaar-PAN link status.
If the validation fails, click 'Link Aadhaar' on the Status page, and you will need to repeat the steps to link your PAN and Aadhaar. If your request to link PAN and Aadhaar is pending with UIDAI for validation, you will need to check the status later.
Aadhaar verification/authentication is governed by the sections of the Aadhaar Act, 2016. UIDAI does not have visibility of the linking of your Aadhaar with any other services. Concerned departments such as banks, income tax, etc., do not share any information of the Aadhaar number holder, nor does UIDAI store any such information.
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Consequences of not linking PAN with Aadhaar
Linking your PAN with Aadhaar is a mandatory process for all Indian citizens. It is a crucial step in reforming the government's delivery system and creating a transparent financial and general identity structure. The process simplifies tax compliance, making it easier to issue refunds, process income tax returns (ITRs), and track financial transactions.
However, if you fail to link your PAN with your Aadhaar, there are several consequences:
- Tax Deduction/Collection at a Higher Rate: If you do not link your PAN with Aadhaar, you will be subject to tax deduction/collection (TDS/TCS) at a higher rate under Sections 206AA and 206CC of the Income Tax Act, 1961. This means that a larger portion of your income will be deducted as tax, resulting in a higher tax liability.
- Inoperative PAN Card: Your PAN card will become inoperative, which means you will not be able to use it for financial transactions or to file your income tax returns. An inoperative PAN card will also lead to pending tax refunds not being issued.
- Difficulty in Accessing Government Services: A linked PAN and Aadhaar are required when applying for government services such as a passport, obtaining subsidies, or opening a bank account. Not having a linked PAN and Aadhaar will create obstacles in availing of these essential services.
- Penalty Fee: The Indian government has imposed a penalty for the delay in linking PAN with Aadhaar. A late fee of Rs. 1,000 is charged for reactivating an inoperative PAN card. Additionally, the government collected a total penalty of Rs. 600 crore from July 1, 2023, to January 31, 2024, from those who failed to meet the deadline.
- Limited Financial Transactions: When your PAN becomes inoperative due to non-linking, you will face restrictions on financial transactions. This includes limitations on cash deposits, purchases of mutual fund units, bank drafts, or time deposits exceeding certain amounts.
- Inability to Claim Tax Refunds: Even if you have filed your income tax returns before your PAN becomes inoperative, you will be unable to claim any pending tax refunds. This could result in significant financial losses.
It is important to note that certain individuals are exempt from linking their PAN with Aadhaar, including non-resident Indians (NRIs), individuals not citizens of India, super senior citizens (aged 80 years or above), and residents of Assam, Meghalaya, and Jammu & Kashmir. However, for the majority of Indian citizens, linking PAN with Aadhaar is mandatory to avoid these consequences and ensure a smooth financial and governmental transaction experience.
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How to check the status of your Aadhaar-PAN link request
Linking your PAN with Aadhaar is a mandatory process that allows your income tax returns to be processed. For new applicants of PAN cards, the Aadhaar PAN linking is done automatically during the application stage. However, for existing PAN holders who were allotted PAN on or before 1 July 2017, it is mandatory to link PAN with Aadhaar. If you do not link your PAN with Aadhaar, your PAN will become inoperative.
Using the e-Filing Portal:
- Go to the e-Filing Portal homepage: Visit the e-Filing Portal homepage and log in to your account. You can also access the portal by visiting the Income Tax Department website.
- Navigate to the Dashboard: Once you are logged in, go to the 'Dashboard' section. Here, you will find options to check the status of your Aadhaar-PAN link request.
- Check the Link Aadhaar Status: On the Dashboard, you can click on the 'Link Aadhaar Status' option. Alternatively, you can go to 'My Profile' and then click on 'Link Aadhaar Status'.
- View the status: If your Aadhaar is already linked to your PAN, the Aadhaar number will be displayed. If it is not linked, you will see a message like "Link Aadhaar Status" or "PAN not linked with Aadhaar."
Using SMS:
- Send an SMS: You can also check the status of your Aadhaar-PAN link request by sending an SMS to '567678' or '56161'.
- Wait for the response: You will receive a response from the government service confirming whether your Aadhaar is linked to your PAN. The message will indicate if the Aadhaar is already associated with PAN in the ITD database or if it is not associated.
It is important to note that there may be a delay in the linking process, and it can take up to 30 days for the reactivation of your PAN card after submitting the link request. Additionally, there may be a penalty for linking your PAN with Aadhaar after specific dates, as mentioned in the guidelines.
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Exemptions to linking PAN with Aadhaar
The Indian government has made it mandatory to link the Unique ID Card, or Aadhaar, with the Permanent Account Number (PAN) to bring more transparency to financial dealings and eliminate tax evasion. However, there are certain exemptions to this rule.
Firstly, individuals who are over 80 years old are not required to link their PAN with Aadhaar. This exemption considers the potential challenges that older adults may face in navigating the technological and procedural aspects of linking the two identifiers.
Secondly, non-resident and non-citizen individuals are also exempt from linking their PAN with Aadhaar. This exemption recognises that non-residents and non-citizens may not have an Aadhaar card or may have different requirements for financial transactions and tax compliance.
It is important to note that for those who are required to link their PAN with Aadhaar, the deadline was 30 June 2023. Failure to meet this deadline can result in the PAN becoming inoperative, leading to consequences such as the inability to file income tax returns, claim refunds, or access certain financial transactions.
To link your PAN with Aadhaar, you can follow these general steps:
- Visit the e-Filing Portal of the Income Tax Department.
- Log in to the portal using your credentials.
- Navigate to the "Link Aadhaar" option, which may be found under "Quick Links" or in your profile section.
- Enter your PAN and Aadhaar numbers as requested.
- Follow the subsequent instructions, which may include OTP verification, to complete the linking process.
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Frequently asked questions
You can link your PAN with Aadhaar on the e-Filing Portal. First, register yourself on the portal if you are not already registered. Then, log in and enter your PAN and Aadhaar numbers. After this, you will need to pay a fee through e-Pay Tax.
If you do not link your PAN with Aadhaar, your PAN will become inoperative.
The deadline to link PAN with Aadhaar was 30 June 2023. However, citizens who obtained their PAN card on or before 1 October 2024 using an Aadhaar enrolment ID have until 31 December 2025 to link their PAN with Aadhaar for free.
If there is a mismatch in your name, phone number, or date of birth, you are advised to avail the option of biometric-based authentication at dedicated centres of PAN Service Providers.
If your PAN becomes inoperative, you will need to pay a fee of Rs.1,000 to make it operative again.
