The government of India has mandated the linking of Permanent Account Number (PAN) with Aadhaar to prevent tax evasion and streamline the tax system. The deadline for linking PAN and Aadhaar is March 31, 2023. However, due to various reasons, including the Covid-19 pandemic, many taxpayers were unable to link their PAN and Aadhaar before the deadline. In this article, we will discuss the latest update on the deadline for linking PAN and Aadhaar, the fee for linking, consequences of not linking, and why it is important for taxpayers to link their PAN and Aadhaar.
What is PAN and Aadhaar?
The Permanent Account Number (PAN) is a ten-digit alphanumeric identifier, which is issued by the Income Tax Department to all taxpayers in India. It is a unique identification number that is used to track financial transactions and prevent tax evasion.
The Aadhaar number, on the other hand, is a twelve-digit unique identification number that is issued by the Unique Identification Authority of India (UIDAI) to residents of India. It serves as a proof of identity and address and is required for availing various government services and schemes.
The Deadline for Linking PAN and Aadhaar
The government of India had mandated the linking of PAN and Aadhaar to prevent tax evasion and streamline the tax system. The last date for linking PAN and Aadhaar is March 31, 2023. However, due to various reasons, including the Covid-19 pandemic, many taxpayers were unable to link their PAN and Aadhaar before the deadline.
As per recent news reports, the government is likely to extend the deadline for linking PAN and Aadhaar by another two-three months. The Central Board of Direct Taxes (CBDT) is expected to issue a notification to this effect soon.
Fee for Linking PAN and Aadhaar
While extending the deadline on March 30, 2022, the CBDT had set a fee of Rs. 500 for up to three months from April 1, 2022, and Rs. 1000 after that. This fee was applicable for those who failed to link their PAN and Aadhaar within the specified time period.
If the deadline for linking PAN and Aadhaar is extended again, an additional late fee will have to be paid for the further extended period as well.
Consequences of Not Linking PAN and Aadhaar
It is mandatory for taxpayers to link their PAN and Aadhaar as per the government’s directive. Failure to do so can result in serious consequences. After March 31, 2023 (or as may be extended further), the PAN of individuals who fail to link it with their Aadhaar will become inoperative. All the consequences under the Income Tax Act for not furnishing, intimating, or quoting the PAN shall apply to such taxpayers.
Quoting Aadhaar is mandatory for filing income tax returns (ITRs) as well as for obtaining a new PAN. Therefore, taxpayers are advised to link their PAN and Aadhaar as soon as possible to avoid any inconvenience or penalties.
Conclusion
If the government’s decides to extend the deadline for linking PAN and Aadhaar by another two-three months, the same will come as a relief to many taxpayers who are unable to link their PAN and Aadhaar before the deadline of March 31, 2023. However, it is important to note that additional late fee is likely to be imposed for the extended period. Taxpayers are advised to link their PAN and Aadhaar as soon as possible to avoid any inconvenience or penalties.
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