The CBDT has advised all PAN holders to link their PANs with Aadhaar immediately, unless specifically exempted by Notification 37/2017. Otherwise, the unlinked PAN will become inoperative/inactive with effect from April 1, 2023.
According to IT Section 139AA, every person who has been assigned a PAN as of the 1st of July 2017 and is eligible to obtain an Aadhaar number must link their Aadhaar and PAN before March 31, 2022 without fee and before March 31, 2023 with the prescribed fee. The Finance Act, 2022, provides for an increased penalty/fee of Rs. 1,000, effective July 1, 2022, for taxpayers who fail to link their PAN and Aadhaar in a timely manner.
CBDT has categorically stated that all PAN holders, who do not come under the exempt category as per Notification No. 37/2017, dated May 11, 2017 and have not linked their Aadhaar with PAN yet, are requested to do so immediately. Failure to do so will lead to the unlinked PAN becoming inoperative.
Exempted category of persons as per above Notification includes assessees who are-
(i) residing in the States of Assam, Jammu and Kashmir and Meghalaya;
(ii) a non-resident as per the Income-tax Act, 1961;
(iii) of the age of eighty years or more at any time during the previous year;
(iv) not a citizen of India.