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March 24, 2021

Link your PAN with Aadhaar by 31st March else penalty of Rs 1000

by CA Jessica Nagaonkar in Compliance Law, Corporate Law

Link your PAN with Aadhaar by 31st March else penalty of Rs 1000

Section 139AA was inserted in the Income Tax Act by Budget 2017. This section makes it mandatory to link PAN with Aadhaar. This section states that every person who has PAN as on July 1, 2017 is required to link his/her PAN with his/her Aadhaar number. As per the rules if PAN is not linked with Aadhaar by the due date, then the PAN will become invalid. One will not be able to use their PAN to conduct financial transactions where quoting of PAN is mandatory. The PAN and Aadhaar can be used interchangeably, once linked. It has also become mandatory to quote and link Aadhaar number while filing income tax returns unless specifically exempted. 

The last date to link PAN to Aadhar is 31st March, 2021. The last date to link PAN with Aadhaar will not be applicable to the following persons, only if they do not have Aadhaar number or Aadhaar Enrolment ID: 

  • Non-resident Indians as per the Income Tax Laws 
  • Not a citizen of India 
  • Is of age 80 years or more at any time during the tax year 
  • Resident of the states of Assam, Meghalaya and Jammu and Kashmir

Bank Started sending message to link else higher TDS will be deducted on interest income

Following is the one message from ICICI Bank for linking PAN with Aadhaar

Dear Customer, as per section 139AA of the Income Tax Act 1961, it is mandatory to link your Permanent Account Number (PAN) with your Aadhaar by 31-Mar-21. If not linked by 31-Mar-21, the PAN provided by you will become inoperative. Failure to link will also attract a higher TDS rate on interest earned and might also impact certain bank transactions where PAN is considered. Also note that TDS once deducted cannot be refunded by the Bank under any circumstances. To check the status of the linkage of your PAN with Aadhaar, visit https://www1.incometaxindiaefiling.gov.in/e-FilingGS/Services/AadhaarPreloginStatus.html.

To know more on how to link PAN with Aadhaar, visit https://uidai.gov.in/282-faqs/your-aadhaar/aadhaar-letter/1884-how-do-i-link-pan-with-aadhaar.html Please ignore if already linked-ICICI Bank.

Penalty applicable if PAN is not linked with Aadhaar by 31st March

  • PAN cardholders who fail to link it with their Aadhaar card will have to furnish a huge penalty after the deadline ends on March 31.
  • The Finance Bill (Lok Sabha) has inserted a new Section 234H to levy a fee for default in intimating the Aadhaar number.
  • If a person is required to intimate his Aadhaar under Section 139AA(2) and such person fails to do so, he shall be liable to pay a fee, as may be prescribed, not exceeding Rs 1,000 at the time of making such intimation.
  • The Income Tax Department had said that PAN will become inoperative if not linked with Aadhaar by March 31.
  • However, it will again become operative once the individual links it with the Aadhaar card.

How can one link Aadhar with PAN?

Using the income tax department’s portal

Step 1: Visit the income tax department’s e-filing portal: http://incometaxindiaefiling.gov.in/

Step 2: Click on the ‘Link Aadhaar’ section on the left.

Step 3: Fill in the PAN number, Aadhaar number, name and the CAPTCHA.

Step 4: Click on the ‘Link Aadhaar’ option. The income tax department will validate your details, thereafter your PAN- Aadhaar linking will be completed.

Using SMS service

The documents can also be linked by sending an SMS to 567678 or 56161 from your registered mobile number after typing UIDPAN and clicking send. The format for the SMS is: Type UIDPAN (12-digit Aadhaar number), put space (10-digit PAN) and send it to 567678 or 56161.

Linking Aadhaar card with PAN manually

In order to link the documents manually, visit a service centre for your PAN card and fill the ‘Annexure-I’ form. Attach the form with a copy of the PAN and Aadhaar cards. For linking the documents manually, a prescribed fee is charged, unlike the online linking which is free.

How you can check the PAN-AADHAAR linking status?

Step 1: Visit the official Income Tax department website

Step 2: Click on the link reading ‘Link AADHAAR status’

Step 3:  You will be redirected to a new page

Step 4: Enter your AADHAAR card and PAN card number. The status will be displayed

How to check the status of interlinking via SMS?

Step 1: You need to type UIDPAN <12-digit AADHAAR> <10-digit PAN>

Step 2: You can send this message either on 56768 or on 56161

The government has in the past given several extensions to allow people to link Aadhaar and PAN, it appears now they want to penalise those who don’t do it within due date by levying a late fee. Also, as per rule 114AAA, in case where a person is required to furnish or intimate his PAN and the PAN is inoperative, it will be deemed that he or she has not furnished PAN. Under various provisions of the Income Tax Act if a person doesn’t furnish PAN or gives an inoperative PAN he or she may have to a pay a higher TDS (tax deducted at source) or TCS (tax collected at source), and may not be able to file income tax return and may face the consequences of not filing the tax return.

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