PAN card holders could be fined Rs 10,000 for each non-compliance if they fail to do so

If your Permanent Account Number (PAN) is not linked to your Aadhaar card, your PAN card will become inoperative from April 1, 2022. The Income Tax Department has extended the deadline to March 31, 2022 wherein all PAN maps in India must be linked to Aadhaar maps. All such PAN cards which are not related to Aadhaar cards would be declared inoperative after the time limit expires.

In accordance with Section 139AA of the Income Tax Act, anyone who has a PAN as of July 1, 2017 and is eligible to obtain the Aadhaar must link the PAN to the Aadhaar. The taxpayer must mention the Aadhaar number while filing a tax return.

If the PAN becomes inoperative, the tax service will consider that the person has not submitted a PAN and therefore liable to the consequences for it. “Where a person, whose permanent account number has become inoperative…, is required by law to give, imply or quote his permanent account number, he shall be deemed not to have provided, implied or quoted the permanent account number, as the case may be, in accordance with the provisions of the law, and he will be liable for all consequences provided by law for not providing, suggesting or quoting the account number permanent”, mentioned the CBDT.

A hefty penalty of Rs 10,000 each time you fail to provide a PAN number

It should be noted that the possession of a PAN card is mandatory for several purposes, such as opening a bank account, buying mutual funds or stocks and even carrying out cash transactions of more of Rs 50,000.

According to Section 272B of the Income Tax Act, a penalty of Rs 10,000 may be imposed if the PAN is not quoted or provided as required by the Income Tax Act. Under these provisions, a penalty could be imposed for each non-compliance.

Explaining the rule, Naveen Wadhwa, DGM, Taxmann said, “A penalty of Rs 10,000 would be imposed on each default. Suppose Mr. A’s PAN becomes inoperative. He makes a payment to a hotel in cash for an amount above Rs 50,000 and also makes a cash payment for the purchase of foreign currency for an amount above Rs 50,000. In this situation, the tax department on the income may impose a penalty of Rs 20,000, i.e. Rs. 10,000 for each default.

In the 2021 Budget, the Union Government added a new Section 234H in the Income Tax Act, where an individual will have to pay a penalty if PAN and Aadhaar are unrelated after the time limit expires. Thus, if an individual fails to meet the deadline, he will be liable to pay a penalty not exceeding more than Rs 1,000.

Commenting on the PAN Aadhaar linking deadline, Sujit Bangar, Founder of Taxbuddy.com, said, “Even though the PAN Aadhar linking deadline has been extended to March 31, 2022, it is advisable to complete this connection as soon as possible. The link between PAN and Aadhar has many advantages, such as receiving the refund quickly. »

Your inoperative PAN cards will become operational as the Aadhaar linking process is completed. If you are unsure whether your PAN is linked to Aadhaar, you can check the status here.

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