Introduction

Linking your PAN (Permanent Account Number) with your Aadhaar card is crucial, and the deadline for doing so is approaching rapidly. Failing to complete this process can have severe consequences for taxpayers. From July 1, 2023, if you have not linked your PAN with Aadhaar, your PAN will become inoperative. In this article, we will explore the implications of not linking your PAN with Aadhaar and who is exempted from this requirement.

Consequences of Not Linking PAN with Aadhaar

1. No Refund Shall Be Made Against Inoperative PANs

If you fail to link your PAN with Aadhaar, you will not be eligible for any refunds. This means that any tax refunds you are entitled to will not be processed until the linkage is completed.

2. No Interest Payable on Refunds

During the period when your PAN remains inoperative, no interest will be paid on any eligible refund amount. It is crucial to ensure the linkage to avoid any financial losses or delays in receiving refunds.

3. Higher TDS and TCS Deductions/Collection

Failure to link your PAN with Aadhaar will result in higher Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) deductions. The applicable rates, as defined in the Act, will be implemented until the linkage is completed.

4. Reactivating the PAN

If your PAN has become inoperative due to non-compliance, you have the option to reactivate it by following the prescribed procedure. This involves informing the designated authority and paying a cost of Rs.1,000. Once the necessary steps are completed, your PAN can be made operational again within 30 days.

Exemptions from Aadhaar-PAN Linkage

The requirement of linking Aadhaar with PAN does not apply to certain individuals. You are exempted if you fall into one of the following categories:

1. Residing in Assam, Jammu and Kashmir, and Meghalaya

Individuals residing in the states of Assam, Jammu and Kashmir, and Meghalaya are not obligated to link their Aadhaar with PAN.

2. Non-Resident as per the Income-tax Act, 1961

Non-residents, as defined by the Income-tax Act, 1961, are exempted from the requirement of Aadhaar-PAN linkage.

3. Age of Eighty Years or More

If you are eighty years old or older at any time during the previous year, you are not required to link your Aadhaar with PAN.

4. Not a Citizen of India

Individuals who are not citizens of India are also exempted from the Aadhaar-PAN linkage requirement.

Check Your PAN-Aadhaar Linkage Status

If you are uncertain whether your PAN and Aadhaar are linked, you can easily check the status on the official Income Tax website. Visit the website and follow the instructions to verify the linkage between your PAN and Aadhaar.

Conclusion

The deadline for linking your PAN with Aadhaar is rapidly approaching. Failing to comply with this requirement can lead to various consequences, including the inoperability of your PAN, no refunds, higher TDS and TCS deductions/collection, and the absence of interest on refunds. However, there are exemptions for individuals residing in certain states, non-residents, those aged eighty or above, and non-citizens of India. To avoid any complications, make sure to check the status of your PAN-Aadhaar linkage and complete the process promptly. Stay compliant and enjoy the benefits of a well-maintained financial profile.