Here’s Why You May Face Rs 10,000 Penalty For Not Linking PAN With Aadhaar

The present deadline to link one's PAN with Aadhaar is 31 March 2020. On failing to do so, your Permanent Account Number (PAN) will become inoperative, according to a statement by the Income Tax Department issued last month. This means that it poses a threat to attract a fine of Rs 10,000 on providing inoperative PAN for a financial transaction.

Last month CBDT (Central Board of Direct Taxes) said, "Where a person, who has been allotted the permanent account number as on July 1, 2017 and is required to intimate his Aadhaar number under sub-section (2) of section 139AA, has failed to intimate the same on or before March 31, 2020, the permanent account number of such person shall become inoperative immediately after the said date for the purposes of furnishing, intimating or quoting under the Act."

It also said that an amendment has been made to the Income Tax rules with the insertion of Rule 114AAA, stipulating the "manner of making permanent account number inoperative".

If you were to miss the deadline to link the two, you will also be liable for all the consequences under the IT Act for not furnishing, intimating or quoting the PAN, which includes paying higher income tax.

Further, as per rules, any person who quotes a cancelled or inoperative PAN is liable to pay a fine of up to Rs 10,000 under section 272B of the Income Tax Act.

In its 13 February 2020 notification, CBDT had also notified that for those who link their PAN after Aadhaar, the inoperative PAN shall "become operative from the date of intimation of Aadhaar number".

The Supreme Court had in September 2018 declared Aadhaar as constitutionally valid and held that the biometric ID would remain mandatory for the filing of income tax returns and allotment of PAN cards.

The deadline to link the two has been extended several times by the tax department.