New Tax Rule Says Link Pan And Aadhaar By March 31, 2022; If Not, Pay Penalty

Link your Permanent Account Number (PAN) and Aadhaar before March 31, 2022; if not, then there is a penalty, and your PAN becomes inactive, said the finance ministry.

Under the provisions of the Income-tax Act, 1961 (“the Act”), every person who has been allotted a PAN as of July 1, 2017, and is eligible to obtain an Aadhaar Number, is required to intimate their Aadhaar to the prescribed authority on or before March 31, 2022.

On failure to do so, his PAN shall become inoperative, and all procedures in which PAN is required shall be halted.

The PAN can be made operative again upon intimation of Aadhaar to the prescribed authority after payment of a prescribed fee.

However, to mitigate the inconvenience to the taxpayers, as per Notification No.17/2022 dated March 29, 2022, a window of opportunity has been provided to the taxpayers up to March 31, 2023, to intimate their Aadhaar to the prescribed authority for Aadhaar-PAN linking without facing repercussions.

As a result, taxpayers will be required to pay a fee of Rs. 500 up to three months from April 1, 2022, and a fee of Rs. 1000 after that, while intimating their Aadhaar.

However, till March 31, 2023, the PAN of the assessees who have not intimated their Aadhaar will continue to be functional for the procedures under the Act, like furnishing of return of income, processing of refunds etc. 

A detailed Circular No.7/2022 dated 30.03.2022 has also been issued.

After March 31, 2023, the PAN of taxpayers who fail to intimate their Aadhaar, as required, shall become inoperative, and all the consequences under the Act for not furnishing, intimating or quoting the PAN shall apply to such taxpayers.