With the deadline for linking PAN to Aadhaar card approaching, the implications of failing to finish the process have once again come to the forefront. Earlier this year, the government extended the deadline from March 31, 2023, to June 30, 2023. To link a PAN with an Aadhaar number, go to www.incometax.gov.in.
Citizens must currently pay a Rs 1,000 penalty for linking their Aadhaar Card to their PAN. However, if a person fails to finish the linking before the present deadline, there may be many penalties.
So, what happens if your PAN is not connected to your Aadhaar card?
According to Income Tax Rule 114AAA, a person who has been assigned a PAN as of July 1, 2017, is obligated to notify his Aadhaar number under sub-section (2) of Section 139AA. Failure to do so will result in the PAN being inoperable. This means that, unless the deadline is extended, PANs of persons who have not linked their Aadhaar will become inoperative on July 1. Because the PAN is such an important financial document, it can’t be included in tax paperwork if it becomes inoperative.
According to Income Tax Rule 206AA, those who have not quoted their PAN would pay more tax collected at source (TCS) and tax deducted at source (TDS). Filing income tax returns will also be impossible without a PAN, which means that one may not receive the refunds for which they are eligible.
PAN is also required in a number of financial transactions. PAN is required when opening bank and demat accounts. PAN is also required for depositing more than Rs 50,000 in a single day into bank or post office accounts.
What exactly are TDS and TCS?
Both tax deducted at source and tax collected at source are incurred at the point of income generation. TDS is the tax that is taken from a company’s payment to an individual if the amount exceeds a specified threshold. TCS is a tax collected by sellers when they sell goods to buyers.
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