The recent amendments to the Income Tax Rules have made it mandatory to link Aadhaar with PAN, on or before June 30, 2021. If the PAN is not linked with Aadhaar, the PAN shall be deemed to have become inoperative / invalid in accordance with Rule 114AAA(3) of the Income-tax Rules, 1962 (‘Rules’), from July 1, 2021.
Once your PAN card becomes “Inoperative”, you will not be able to conduct financial transactions. Further, you will be liable to pay a penalty of Rs.1000 if your PAN is not linked with your Aadhaar by June 30, 2021as per the newly added Section 234H of the Income Tax Act, 1961.
Disadvantages of inoperative PAN card:
You may face disruptions in your banking services, debit and credit card payments, foreign tour,purchase of foreign currencies in excess of Rs.50000, online payment through mobile banking and UPI, face higher tax deduction at source (DTS) on you interest, dividend and other incomes etc..
If you’re a Mutual Fund investor, PAN-Aadhaar linking is vital to avoid following disadvantages:New inflows, new SIP/STP/SWP DTP registrations, additional purchases, switches will be restricted.
- Existing SIPs/STPs/SWPs will cease.
2. Investor-initiated redemptions will be restricted.
3. Higher TDS will be deducted for dividends.
4. Dividend processing, maturity processing and other non-investor-initiated transactions will be allowed, but pay-outs will be withheld.
5. You’ll be able to process NFTs on PAN updation/correction only after due validations.
Thus, every person who is eligible to obtain an Aadhaar Card, it is mandatory to link the Aadhaar Card with the PAN Card before the prescribed due date. As per the [notification number 37/2017, F. No. 370133/6/2017-TPL], the government notifies that the provisions of the section 139AA shall not apply to an individual who does not possess the Aadhaar number or the Enrollment ID and is.
- Residing in the States of Assam, Jammu and Kashmir and Meghalaya;
- A non-resident as per the Income-tax Act, 1961;
- Of the age of eighty years or more at any time during the previous year;
- Not a citizen of India.
Therefore, if a person is an NRI, a Foreign Citizen, a super senior citizen, or an individual from Assam, J&K and Meghalaya, then it is not mandatory for him/her to obtain an Aadhaar and eventually it is not mandatory to link it to the PAN Card.
There are 3 methods available to link PAN card with Aadhar Number
Method 1 – Visit the Income Tax e-Filing website. Follow the listed steps to link your PAN and Aadhaar in minutes
Method 2: Send SMS to 567678 or 56161 from your Aadhaar-registered mobile number in the following format:
UIDPAN <12-digit Aadhaar Number> <10-digit PAN>
Method 3: You can also visit a designated PAN Service Centre and manually fill the specified form.
Note: An inoperative PAN Card will become operative once linked with an Aadhaar Card.
Related Post: If you have lost or misplaced your PAN card, read below article on how to download an e-card from Income Tax portal.