PAN not linked with Aadhaar by end of March 2023 to be rendered inoperative; check details

According to the latest IT advisory, "It is mandatory for all the PAN holders, who do not fall under the exempt category, to link their PAN with Aadhaar before 31.3.2023, according to Income-tax Act 1961. From 1.04.2023, the unlinked PAN shall become inoperative."

Team Newsable

First Published Dec 24, 2022, 4:42 PM IST

The Income Tax department issued an advisory on Saturday, December 24, stating that the Permanent Account Numbers (PANs) that are not linked with the Aadhaar by the end of March this year are to be declared 'inoperative.' In a public advisory, the department said, "What is mandatory is necessary. Don't delay; link it today!"

Additionally, the advisory read, "It is mandatory for all the PAN holders, who do not fall under the exempt category, to link their PAN with Aadhaar before 31.3.2023, according to Income-tax Act 1961. From 1.04.2023, the unlinked PAN shall become inoperative."

As per the notification issued by the Union Finance Minister in May 2017, the 'exempt category' includes individuals residing in the states of Assam, Jammu and Kashmir, and Meghalaya; being a non-resident under the Income-tax Act, 1961; being 80 years of age or older at any time during the previous year, and not being a citizen of India.

According to a circular issued by the Central Board of Direct Taxes (CBDT) on March 30, once a PAN becomes inoperative, an individual is liable to all the consequences under the I-T Act and will have to face several consequences.

The person will be unable to file an I-T return using the inoperative PAN; pending returns will not be processed; pending refunds will not be issued to inoperative PANs; pending proceedings, such as defective returns, will be unable to be completed once the PAN is inoperative; and tax will be deducted at a higher rate.

The circular read, "Additionally, the taxpayer may encounter difficulties at various other fora including banks and other financial portals as PAN is an important KYC (know your customer) criterion for all financial transactions." The CBDT forms policies for the Income Tax Department.

While the Unique Identification Authority of India issues Aadhaar to a resident of India, PAN is a 10-digit alphanumeric number assigned to a person, firm, or entity by the IT Department.

(With inputs from PTI)

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Last Updated Dec 24, 2022, 4:42 PM IST