Mandatory Linking of PAN & Aadhaar Card

An Aadhaar card is a centralised and universal identification number supplied to every Indian citizen. The Aadhar Card is a biometric record that stores an individual’s information in a government database and is gradually becoming the government’s principal source of data for public welfare and citizen services. In addition, Finance Minister Nirmala Sitaraman recently proposed a new feature in Budget 2020 that allows users to obtain a quick Permanent Account Number (PAN) using their Aadhaar without submitting a thorough application form. In this Article we’ll discuss about PAN Aadhar Link and how can we Link PAN with Aadhar Card.

Brief overview of PAN Card and Aadhar Card

PAN stands for Permanent Account Number and is used to identify various taxpayers in the country. A Pan Card is a 10-digit unique identity alphanumeric number (including both alphabets and digits) given to Indians, mostly those who pay taxes. The PAN identification system is a computer-based system that issues a unique identification number to each Indian taxpaying organisation. All tax-related information for a person is registered against a single PAN number, which serves as the primary key for information storage. Because this is shared throughout the country, no two persons on tax-paying organisations can have the same PAN.

On the other hand, in early 2010, the Unique Identification Authority of India (UIDAI), a national government organisation, proposed providing unique numbers to each individual in the country after collecting and storing their biometric information. The Aadhaar number is a unique 12-digit number.

The 12-digit number, as well as the cardholder’s fingerprint and other credentials, are all stored on the Aadhaar card. The UIDAI aimed to link the Aadhaar number to banks, subsidies, and even mobile phone service. Aadhaar has grown to become the world’s largest single identification project. According to the rules, a person can only have one Aadhaar number. 

The linking clause of PAN-AADHAR Card

The CBDT has proposed Income Tax Laws (Third Amendment) 2022. CBDT adopts Rule 114’s sub-rule (5A). Sub-rule (5A) states that if a person notifies others of his Aadhaar number beyond the required date between 01-04-2022 and 30-06-2022, he must pay a cost of Rs. 500; and Rs. 1,000 in all other situations. If your PAN is not linked to Aadhaar by March 31, 2023, it will be inactive the next year, commencing April 1, 2023. If your PAN is no longer valid, you will be unable to file a tax return, open a bank account, or invest in mutual funds, among other things.

The new Rule 114 sub-rule (5A) states that if a person links his Aadhaar number to his PAN Card after the required date, you would be responsible for payment:

• Rs. 500 between April 1, 2022, and June 30, 2022, ;
• In all other circumstances, Rs. 1,000. When the Aadhaar number is supplied, the individual is responsible for paying any applicable fees.

Additionally, Rule 114AAA’s subsection (2) stipulates that if someone is asked to disclose, intimate, or cite their PAN but their PAN is no longer valid, it shall be assumed that they have not done so. You will thus be responsible for any effects of providing, informing, or citing PAN.

Procedure for linking PAN and AADHAR Card

The PAN-Aadhaar link to the tax portal was just allowed by the income tax department. But you must first pay the required cost in order to link PAN with Aadhaar. There are two key actions:

Step: 1 Payment of appropriate cash under Major Head (0021) and Sub-Head (500) of AY 2023–24 in the NSDL portfolio (now Protean).The assessment year should be 2023–2024 and a single challan should contain payments of Rs. 500 or Rs. 1000.

Step: 2  After 4-5 working days after payment via the NSDL (now Protean) website, submit an Aadhaar connection request to the e-Filing portal.After 4-5 working days, proceed to the income tax portal. Visit the income tax filing website and log in. You may access the PAN-Aadhaar link option on the profile page. You must input the PAN number and Aadhaar number after selecting the option. The gateway will ask for payment confirmation when you enter the number. You must mention your name as it appears on your Aadhaar when confirming a payment. You will be prompted to enter your OTP after entering a name. It is necessary to register with Aadhaar in order to link your phone number. The procedure of connection will be finished in a successful OTP generation.

What takes place if PAN and Aadhaar are not linked?

A CBTD media release states that taxpayers have until March 31, 2023 to inform the designated authorities of the Aadhaar-PAN link without filing, in order to lessen the annoyance to taxpayers. As a result, taxpayers will pay Rs. 500 for the first three months and Rs. 1000 starting on April 1, 2022.

Your PAN will therefore be functional by March 31, 2023, and PAN-Aadhaar connections are possible for a charge.

It is notable that under section 272B, the tax authorities have the authority to impose a punishment of up to Rs 10,000.

How can I verify that my Aadhaar Card and PAN Card are linked?

To check if your PAN has already been connected to your Aadhaar number, follow the steps below.

• Fill out the form by going to the incometax.gov.in site.
• Select Aadhaar Link Status from the Quick Links section.
• Aadhaar and Pan numbers must be entered.
• From the drop-down option, choose View Aadhaar Status Link.

If your PAN is associated with your Aadhaar number, a pop-up will appear to confirm this.

Takeaway

People who do not connect their PAN cards to their Aadhaar cards may be penalised and their PAN may become invalid. A penalty shall be imposed in accordance with Section 234H of the Income Tax Act, 1961. The fine amount has not been declared, however it will not exceed Rs 1,000 if you link it beyond the due date.

Ask our Experts to help you with obtaining with your PAN Card and Aadhar Card. Legal Window will help you through with the filing process.