PAN-Aadhaar Linking before March 31; Here's what happens if you don't link PAN-Aadhaar

New Delhi: With less than a month left to link your Permanent Address Number, or PAN, to your Aadhaar, it is critical that you understand what will happen if you do not meet this deadline. One of the most important tasks the government wants you to complete by March 31, which is next Thursday, is linking your PAN with your Aadhaar number. Though the Central Board of Direct Taxes, or CBDT, has repeatedly postponed the deadline for linking Aadhaar and PAN, the department has made it clear that completion of the task is mandatory.

"The Central Government, in continuation of its commitment to address the hardship being experienced by various stakeholders as a result of the Covid-19 pandemic, has decided to extend timelines for compliances under the Income-tax Act," said the CBDT in a notification.

"The time limit for informing the Income Tax Department of an Aadhaar number in order to link a PAN with an Aadhaar has been extended from 30th September, 2021 to 31st March, 2022," it added.

If you do not link your PAN to Aadhaar by March 31, you may face a slew of penalties, including the inactivation of your PAN. When your PAN becomes inoperative, it is the same as if you do not have the document at all.

Issues you are likely to face if you fail to link PAN-Aadhaar:

• The government has added a new section 234H to the Income Tax Act of 1961. This allows the authorities to impose a penalty on the individual if the work is not completed by the deadline. The CBDT has clarified, however, that the penalty cannot exceed Rs 1,000. However, that is not the only fine you will face; providing an invalid PAN will result in a Rs 10,000 fine.
• If you do not have an active PAN, you will be unable to perform any work that necessitates the document. This includes any investment where your KYC is required to complete the transaction, such as a bank account, mutual funds, stock market, or other investments. To complete the KYC process, you must have an active PAN.
• If your PAN is not linked to a bank account, you will be required to pay double TDS (Tax Deduction at Source). If your bank account is seeded with your PAN, you must pay a 10% TDS.
• If you link your PAN and Aadhaar after the due date, the government may levy a fine at the time of linking, according to the CBDT. As a result, it is recommended that PAN Aadhar be linked before March 31, 2022.
• There are two methods for linking your PAN to your Aadhaar card. One method is to use SMS, while the other is to use the official portal of the Income-Tax Department.