PAN Aadhaar Link: What happens if you fail to meet March 31 deadline? | India Business News
Earlier, as per the rule, if PAN was not linked with Aadhaar by a specified date, then the 10-character alphanumeric identifier would become ‘invalid’. But the income tax (I-T) department later changed its stance to ‘inoperative’.
What happens if PAN becomes inoperative?
In case of inoperative PAN, “furnishing, intimating or quoting” the number for financial transactions under the I-T Act isn’t allowed until it is linked with Aadhaar. Whereas if deemed invalid (not applicable now), it was interpreted that a person never had PAN.
Aadhaar is issued by the Unique Identification Authority of India, or UIDAI, to a resident of India and PAN is a 10-digit alphanumeric number allotted by the I-T department to a person, firm or entity.
Can PAN be linked with Aadhaar after March 31?
The Central Board of Direct Taxes (CBDT) has issued a fresh notice, dated February 13, which mentioned that after March 31, 2020, PAN “shall become operative from the date of intimation of Aadhaar number” and provisions/consequences of not linking the two “shall not be applicable from such date of intimation”. This implies that, PAN could be linked with Aadhaar after the deadline but the condition is that it will become operative once it is linked with the 12-digit unique identification number.
The CBDT frames policies for the tax department.
Section 139 AA (2) of the I-T Act states that every person having PAN as on July 1, 2017, and eligible to obtain Aadhaar, must intimate his/her Aadhaar number to the tax authorities.
‘Manner of making permanent account number inoperative’
The CBDT in its new notification inserted changes in the I-T rules. The new sub-section 114AAA ‘Manner of making permanent account number inoperative’, says “(1) Where a person, who has been allotted the permanent account number as on the 1st day of July, 2017 and is required to intimate his Aadhaar number under sub-section (2) of section 139AA, has failed to intimate the same on or before the 31st day of March, 2020, the permanent account number of such person shall become inoperative immediately after the said date for the purposes of furnishing, intimating or quoting under the Act,” the CBDT notification said.
A person, who hasn’t linked PAN with Aadhaar, shall be liable for all the consequences under the I-T Act. “(2) Where a person, whose permanent account number has become inoperative under sub-rule (1), is required to furnish, intimate or quote his permanent account number under the Act, it shall be deemed that he has not furnished, intimated or quoted the permanent account number, as the case may be, in accordance with the provisions of the Act, and he shall be liable for all the consequences under the Act for not furnishing, intimating or quoting the permanent account number,” it added.
The notification’s third point mentioned the situation in which PAN could be linked with Aadhaar. “(3) Where the person referred to in sub-rule (1) has intimated his Aadhaar number under sub-section (2) of section 139AA after the 31st day of March, 2020, his permanent account number shall become operative from the date of intimation of Aadhaar number for the purposes of furnishing, intimating or quoting under the Act and provisions of sub-rule (2) shall not be applicable from such date of intimation,” it read further.
It can be noted that PAN can be linked with Aadhaar by sending SMS (short messaging service), by visiting e-filing website or by visiting assigned PAN service centre. Taxpayers are advised to complete the PAN-Aadhaar linking process before the deadline.
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