The Income Tax Department on Saturday issued an advisory that Permanent Account Number (PAN) not linked to Aadhaar will be “deactivated” by the end of March next year.
“What is essential is essential. Don’t delay, link today!” the department said in a public consultation.
“As per the Income Tax Act, 1961, it is mandatory for all PAN holders, who do not fall in the exempted category, to link their PAN with Aadhaar before 31.3.2023. From 1.04.2023, unlinked PAN will become inactive , ” it said.
According to a notification issued by the Union Ministry of Finance in May 2017, the ‘exempted category’ are persons residing in the states of Assam, Jammu and Kashmir and Meghalaya; a non-resident as per the Income-tax Act, 1961; A person of the age of 80 years or more and not being a citizen of India at any time during the previous year.
A circular issued by the Central Board of Direct Taxes (CBDT) on March 30 said that once the PAN becomes inoperative, a person would be liable for all consequences under the IT Act and would face multiple implications.
The person will not be able to file IT returns using an inoperative PAN; Pending returns will not be processed; Refund pending for inoperative PAN cannot be issued; In case of defective returns, the pending proceedings cannot be completed after PAN has been deactivated and tax will be required to be deducted at the higher rate.
The circular states, “In addition to the above, the taxpayer may face difficulty at various other fora such as banks and other financial portals as PAN is one of the important KYC (Know Your Customer) criteria for all types of financial transactions.” There is one.”
The CBDT formulates policy for the Income Tax Department.
While Aadhaar is issued by the Unique Identification Authority of India to a resident of India, PAN is a 10-digit alphanumeric number allotted by the IT department to an individual, firm or entity.