The Central Board of Direct Taxes (CBDT) has recently issued a fresh notification saying PAN, not linked to Aadhaar, would become 'inoperative' after March 31, 2023.
According to the Income Tax Department notification, non-linking of PAN with Aadhaar by March 31 would attract a fine of up to Rs 1,000. But such PAN will remain functional for one more year till March 31, 2023 and it can be used for filing Income Tax returns (ITR), claiming refunds and other I-T procedures.
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Under the provisions of the Income Tax Act, 1961, it is mandatory to link PAN and Aadhaar on or before March 31, 2022.
According to the CBDT circular dated March 30, 2022, “Further, rule 114AAA of the Income-tax Rules provides that if PAN of a person has become inoperative, he will not be able to furnish, intimate or quote his PAN and shall be liable to all the consequences under the Act for such failure.”
"On failure to do so... 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," a Ministry statement said.
"In order 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 upto March 31, 2023 to intimate their Aadhaar to the prescribed authority for Aadhaar-PAN linking without facing repercussions."
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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 1,000 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."
