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Consequences of not linking PAN number with your Aadhaar card

Under the Income Tax Act 1961, every person who has been allotted Permanent Account Number (PAN) and is eligible to obtain an Aadhaar Number shall mandatorily link PAN with Aadhaar. The deadline to link PAN with Aadhaar was extended from the previous deadline of March 31, 2023 to June 30, 2023 by the Central Board of Direct Taxes (CBDT). So, the last date to link PAN with Aadhaar was June 30, 2023. So, after June 30, 2023 if one fails to link their two cards, their PAN will become inactive.

Who needs to file for linking an Aadhaar card and PAN?

According to the Income Tax Act, everyone who has been allotted a PAN as on July 1, 2017, and who is eligible to obtain an Aadhaar number, he/she should have compulsorily linked their Aadhaar and PAN before June 30, 2023.

Who is exempted from linking their Aadhaar and PAN?

Aadhaar-PAN linkage requirement does not apply to any individual who is:

  • Residing in the States of Assam, Jammu and Kashmir, and Meghalaya;
  • A non-resident as per the Income-tax Act, 1961;
  • Of the age of eighty years or more at any time during the previous year; or
  • Not a citizen of India.

What is the amount of penalty for the Aadhaar and PAN linkage?

If the PAN-Aadhaar linking is done on or after July 1, 2022, a Rs1,000 penalty will be levied. It must be paid in a single challan before submitting your request for an Aadhaar-PAN linkage on the e-filing portal.

What are the consequences of not linking Aadhaar and PAN till June 30, 2023?

From July 1, 2023, the PAN of taxpayers who have failed to link their Aadhaar, as required, shall become inoperative. The consequences during the period that PAN remains inoperative will be as follows:

i) No refund shall be made against such PANs;

ii) Interest shall not be payable on such refund for the period during which PAN remains inoperative; and

iii) TDS and TCS shall be deducted /collected at higher rate, as provided in the Act and will also restrict the following specific transactions where quoting of PAN is mandated (applicable to Banks).

  • Cash Deposits above Rs.50,000/- (Single/ Aggregate per day) 
  • Opening of an account, including loan account (other than BSBD accounts) 
  • Time deposit above Rs.50000/- (Aggregate 5 Lakh per annum) 
  • Issuance of Debit/Credit Card (Resident only)
  • Invest/Redeem Mutual Funds 
  • Purchase of any foreign currency above Rs.50,000/- 
  • Sale or purchase of any immovable property 
  • Opening of Demat account 
  • Sale of motor vehicle other than two-wheeler 
  • Purchase or sale of goods or services of any nature other than those specified above for an amount exceeding Rs. 2 Lakh (Gold Auction sale, Scrap sale etc.)

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Note: This Post was last updated on July 1, 2023

Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation i.e. July 1, 2023. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, We assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. We assume no responsibility for the consequences of use of such information. IN NO EVENT SHALL WE SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION.

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