PAN-Aadhaar Linking: Know What Happens If Your PAN Card Becomes Inactive

The Central Board of Direct Taxes (CBDT) had marked the deadline for linking the PAN Card with Aadhaar from as 30 June 2023. Post this, if somebody has not linked PAN with Aadhaar, such PAN cards have been rendered inoperative or inactive.

But an inoperative PAN Card can be made active by linking it with Aadhaar, although a penalty has to be paid by the person seeking to do so.

The CBDT had announced this in a notification regarding completion of the PAN-Aadhaar linking system for detecting false PANs, the Finance Act of 2021 inserted a new section 234H to the Act.

If a person who is required to intimate his Aadhaar under subsection (2) of section 139 AA fails to do so on or before a notified date, he will be liable to pay a fee of not more than Rs 1,000, as may be prescribed, at the time of making intimation under subsection (2) of section 139AA after the notified date, according to this new section.

Since 1 July 2023, the government has been levying a fee of Rs 1,000 for linking an inactive PAN Card with Aadhaar card

(i) The person will not be able to file a tax return with an invalid PAN.

(ii) Returns that have not been processed will not be processed.

(iii) Inactive PANs are not eligible for pending refunds.

(iv) When the PAN is inactive, pending processes, such as defective returns, cannot be completed.

(v) As PAN becomes inactive, tax will have to be deducted at a greater rate.

If a taxpayer has failed to link their PAN to their Aadhaar, they can inform the prescribed authority of Aadhaar and paying the prescribed price, an inactive PAN can be restored again.