|PAN Aadhaar Linking Deadline- 31 March 2021
Permanent Account Number (PAN) is the Indian Tax Identification Number. In India, there is a requirement to obtain an Aadhaar, which is a Unique Identification Number and serves as proof of identity in India. The Income Tax Statute mandates the linking of PAN with Aadhaar. Apparently, this provision seems to have been introduced to inter alia curb the nuisance of duplicate PAN.
Time and again, the government has extended the PAN-Aadhaar linking deadline. Currently, the deadline is 31 March 2021, keeping in mind the outbreak of the COVID-19 pandemic and its consequential hardships. Failure to meet the above deadline would render the PAN inoperative and may entail the following consequences:
Manner of PAN-Aadhaar Linking
- Higher deduction/collection of tax at source- With PAN becoming inoperative, it could be treated that a person does not have a PAN, and the deduction of tax will need to be done at higher rates. This will impact employees, shareholders, lenders and many more. Similarly, taxes could be collected at higher rates too;
- Credit for taxes – Though taxes would be deducted at a higher rate, getting credit for the same may be a challenge;
- Filing of tax return for FY 2020-21- The taxpayer may not be able to file its tax return or if accepted at the income tax portal, such tax return filed could be treated as defective/ invalid return;
- Undertaking Certain Specified Financial Transactions- The taxpayer may not be able to undertake certain financial transactions, such as sale/purchase of motorcar, immovable property, shares/ securities, cash deposits, etc.;
- Penalty of INR 10,000 - The law specifies penalties for non quoting of PAN, if the PAN becomes in-operative, this penalty would be attracted.
Income Tax Department has provided the following facilities to the taxpayers for linking of PAN and Aadhaar: