Know the government services that will be shut down if the PAN becomes inoperative

Even if your PAN has not yet become inoperative if it is not linked to Aadhaar number as the deadline for it has increased it will incur a penalty now for not having done so till now and become inoperative if not done by the new deadline of March 31. , 2023. If the Permanent Account Number (PAN) becomes inoperative, you will stop getting certain key government services.

The PAN-Aadhaar interconnection issue started after the Income Tax Department was informed that multiple Permanent Account Numbers (PANs) had been assigned to one person or that one PAN had been assigned to multiple people.

Last week, the Ministry of Finance said: “Until March 31, 2023, the PAN of assessees who have not hinted at their Aadhaar, will continue to be functional for procedures as required by law, such as providing filing a tax return, processing refunds, etc.”

Services to be affected if PAN is not linked to Aadhaar until March 2023

In a March 30 statement, the Ministry of Finance said: “After March 31, 2023, the PAN of taxpayers who fail to submit their Aadhaar, as required, will become inoperative and all consequences under the law (Law of the ‘Income Tax, 1961) for not furnishing, suggesting or citing the PAN applies to such taxpayers.’

As part of this, the CBDT issued a circular stating that “Rule 114AAA of the Income Tax Rules provides that if a person’s PAN has become inoperative, he may not provide, compel or cite his PAN and shall be liable for all consequences under the law for such failure”. He enlisted the services which will be affected if a person fails to link PAN to Aadhaar:

1) The person cannot file a return using the inoperative PAN

2) Pending returns will not be processed

3) Pending refunds cannot be issued for inoperative PANs

4) Ongoing proceedings such as in the case of defective declarations cannot be completed once the PAN is inoperative

5) Tax will have to be deducted at a higher rate when the PAN becomes inoperative

Penalty for not linking PAN-Aadhaar so far

The Central Board of Direct Taxes (CBDT) in a notification last week said those who have not linked their Aadhaar and PAN numbers so far will have to pay a penalty of Rs 500 if done within three months and of Rs 1,000 if it is done beyond. However, the PAN will remain operational for the time being even though it is not linked to Aadhaar.

The notification issued on March 30 stated: “Any person who under the provisions of subsection (2) of Section 139AA is required to report his Aadhaar number to the prescribed authority in the prescribed form and manner , fails to do so, on the date referred to in the said subsection, shall, at the time of subsequent notification of his Aadhaar Number to the prescribed authority, be liable to pay, as a fee, an amount equal to, – (a) five hundred rupees, if such notice is given within three months from the date referred to in subsection (2) of Section 139AA; and (b) one thousand rupees, in all other cases.”

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