LAST DATE FOR LINKING OF PAN-AADHAAR EXTENDED
Mar 30, 2023
In order to provide some more time to the taxpayers, CBDT has extended the date for linking PAN and Aadhaar to 30th June, 2023, whereby persons can intimate their Aadhaar to the prescribed authority for Aadhaar-PAN linking without facing repercussions. Notification to this effect is being issued separately.
Under the provisions of the Income-tax Act, 1961(the ‘Act’) every person who has been allotted a PAN as on 1st July, 2017 and is eligible to obtain Aadhaar Number, is required to intimate his Aadhaar to the prescribed authority on or before 31st March, 2023, on payment of a prescribed fee. Failure to do so shall attract certain repercussions under the Act w.e.f. 1st April, 2023. The date for intimating Aadhaar to the prescribed authority for the purpose of linking PAN and Aadhaar has now been extended to 30th June, 2023.
Consequences a person may face if his PAN becomes inoperative
From 1st July, 2023, the PAN of taxpayers who have failed to intimate their Aadhaar, as required, shall become inoperative and the consequences during the period that PAN remains inoperative will be as follows:
1. Collection of TCS at higher Rate
Every buyer, licensee or lessee ('collectee') paying any sum, from which tax has to be collected at source under Section 206C, is required to intimate his PAN to the seller responsible for collecting tax. If he does not furnish his PAN to the collector, then tax is collected at a higher rate in accordance with Section 206CC. Thus, even if a collectee has furnished his PAN to the collector, but he does not link it with the Aadhaar, it shall be deemed that he has not furnished his PAN at all. The collector shall be liable to collect tax at higher rate which shall be 5% to 10%, as the case may be. If collector does not verify the status of collectee's PAN, the demand notice may be issued by the Dept. after processing the TCS Statement.
2. Collection of TDS at higher Rate
As per Section 206AA, if a payee fails to furnish his PAN to the deductor then tax shall be deducted at the rate specified in the relevant provision of the Act or at the rate or rates in force or at the rate of 20%, whichever is higher. Thus, the tax has to be deducted at a higher rate if the PAN of payee becomes inoperative. If deductor does not verify the status of PAN of the payee, the demand notice may be issued by the Dept. after processing the TDS Statement.
3. No refunds will be made against such PANs
4. Interest will not be payable on such refund for the period during which PAN remains inoperative
5.. Failure to furnish Return of Income
If PAN becomes inoperative, taxpayers will not be able to file the return of income. Consequently, he shall be liable for the consequences of non-filing of a return, inter-alia, payment of late fee under section 234F, interest under section 234A, forfeiture of current year's losses, best judgment assessment, the penalty for concealment of income, prosecution for failure to furnish return of income, so on and so forth.
6. Penalty for failure to obtain & Quote PAN
A penalty of Rs. 10,000 under Section 272B is levied if a person fails to comply with the provisions of Section 139A which also includes the requirement to furnish or intimate or quote the PAN in certain documents or transactions. If, after furnishing or intimating or quoting the PAN, it becomes inoperative, it will be deemed that the person has not furnished or quoted or intimated his PAN. Thus, the penalty under this provision can be invoked even after furnishing the PAN in specified prescribed authority after payment of fee of Rs.1,000.
The CBDT press release can be accessed at
By CA Dhanush Bolar
