Aadhaar-PAN Link: Impact On TDS Rate; Know This To Protect PAN Card Before June 30

Aadhaar-PAN Link: PAN (Permanent Account Number) and Aadhaar are both important identification numbers for individuals in India. PAN is used for tax purposes, while Aadhaar is used for a variety of other purposes. Linking PAN and Aadhaar is a mandatory requirement for all taxpayers in India, except a few exemptions.

PAN is a 10-digit alphanumeric number issued by the Income Tax Department of India to individuals, Hindu Undivided Families (HUFs), companies, firms, and trusts. It is a unique identification number for all taxpayers. PAN is used by the IT Department to track all financial transactions of taxpayers. It is also used by banks, financial institutions, and other organisations to verify the identity of their customers.

Also Read: Aadhaar-PAN Link Check Online: Easy Steps To Get Status On Your Mobile

Aadhaar is a 12-digit unique identification number issued by the Unique Identification Authority of India (UIDAI). Aadhaar is based on biometric (fingerprint and iris) and demographic (name, date of birth, gender, address) data. Aadhaar is a voluntary scheme, but it is increasingly being used by the government and private sector for a variety of purposes, such as opening bank accounts, applying for loans, and availing government services.

Linking of PAN With Aadhaar

The Finance Act, 2017 had inserted a new section 139AA in the Income Tax Act, 1961, requiring every person who is eligible to obtain Aadhaar to quote his/her Aadhaar number while applying for PAN or furnishing return of income with effect from July 1, 2017.

PAN Aadhaar Link Last Date

The last date for linking PAN with Aadhaar is June 30, 2023.

Consequences Of Not Linking PAN With Aadhaar And Impact on TDS Rate

From July 01, 2023, the PAN of taxpayers who have failed to intimate their Aadhaar, as required, shall become inoperative and the consequences during the period that PAN remains inoperative will be as follows:

• Pending returns will not be processed. Pending refunds cannot be issued to inoperative PANs
• You will not be able to file return using the inoperative PAN
• Interest shall not be payable on such refund for the period during which PAN remains inoperative; and
• Pending proceedings as in the case of defective returns cannot be completed once the PAN is inoperative
• The PAN can be made operative again in 30 days, upon intimation of Aadhaar to the prescribed authority after payment of fee of Rs.1,000.
• Tax will be required to be deducted at a higher rate as PAN becomes inoperative. TDS and TCS shall be deducted /collected at a higher rate, as provided in the Act. TDS is deducted from income at its source, including bank deposit interest, rents, consultation fees, commissions, cryptocurrency or virtual digital assets, and stamp duty, among others.

PAN Aadhaar Link: Impact On TDS

For inoperative PAN holders, TDS will be higher at 20 per cent or the applicable rate, whichever is higher, instead of the normal rate of TDS. The normal TDS rate is as low as 1 per cent on various incomes and investments.

How To Link PAN With Aadhaar?

Linking Via the Income-Tax Department Portal

• Visit the official income tax e-filing website at – https://www.incometaxindiaefiling.gov.in/.
• Under the “Quick Links” tab, click on the “Link Aadhaar” option.
• Alternatively, you can directly visit the Aadhaar linking page by accessing the following URL: https://www.incometaxindiaefiling.gov.in/e-Filing/Services/LinkAadhaarHome.html.
• On the Link Aadhaar page, you will find a form to fill in the required details.
• Enter your PAN, Aadhaar number, and name as mentioned on your Aadhaar card. Cross-check the details carefully to ensure accuracy.
• If your Aadhaar card only has your year of birth mentioned and not the complete date of birth, you will need to tick the box indicating the same.
• After entering the details, you will also need to fill in the “Captcha Code” for verification purposes.
• If you have only your Aadhaar card and not the PAN card, you can select the “I have only Aadhaar” option.
• Once you have filled in all the necessary details, click on the “Link Aadhaar” button.
• If the details entered by you match with the information in the Aadhaar database, your PAN will be successfully linked with Aadhaar.PAN-Aadhaar Linking Via SMS

Step 1: Dial 567678 or 56161 on a mobile device to send an SMS. The format should be UIDPAN (10-digit PAN card number), 12-digit Aadhaar card number, and space.

Step 2: Following that, an SMS will inform you of the PAN-Aadhaar link status. The Aadhaar and PAN will only be linked if the taxpayer’s date of birth matches both documents.

Moreover, those persons who have been exempted from PAN-Aadhaar linking will not be liable to the consequences mentioned above. This category includes those residing in specified States, a non-resident as per the Act, an individual who is not a citizen of India or individuals of the age of eighty years or more at any time during the previous year.