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What happens if you don’t link PAN and Aadhaar card today?

People who do not link their PAN and Aadhaar card by the end of the day are likely to face serious consequences unless the government extends the deadline. Find out what happens if you fail to link the two IDs before April 1, 2021:

UPDATED: March 31, 2021 14:46 IST

The deadline to link PAN and Aadhaar card ends today (March 31). Individuals who are yet to complete the process should do it by the end of the day.

People who fail to complete the linking process before midnight will not only face a penalty of up to Rs 1,000 but their PAN will also become inoperative.

The penalty for not linking PAN and Aadhaar card has been added under a new section (Section 234H) of the Income Tax Act, 1961. It was notified by the government at the time of passing the Finance Bill, 2021 in the Lok Sabha on March 23.

According to Section 234H, if an individual links PAN and Aadhaar card after the notified due date, a penalty will be collected. As per the new law, the penalty amount will not exceed Rs 1,000 and it may vary depending on each case.

The new law will come into effect from April 1 and unless the government extends the deadline, individuals will have to pay the penalty in addition to their PAN becoming inoperative.

The government seems to have introduced the new rule to penalise individuals who have not linked their PAN and Aadhaar card despite several deadline extensions. The law earlier stated that not linking the two IDs will lead to PAN becoming inoperative.

SEVERE CONSEQUENCES

The penalty, however, seems insignificant in comparison to the consequences of an invalid PAN. If PAN becomes invalid or inoperative, you will not be able to conduct any financial transactions where you are required to quote it. For instance, any bank transaction above Rs 50,000 requires PAN.

You will also not be able to file income tax returns (ITR) or open a new bank account. In addition, you will have to pay higher TDS. As per Section 272B of the Income Tax Act, a penalty of Rs 10,000 may also apply in case an operational PAN is not quoted or furnished.

It may be noted that under Section 139AA of the Income Tax Act, individuals who have been allotted PAN as of July 1, 2017, and have an Aadhaar card will have to link them mandatorily.

Therefore, the cost of an invalid PAN is much more than the additional penalty of up to Rs 1,000 and individuals who want to avoid such a situation should link their PAN and Aadhaar card by the end of the day.

Sourcehttps://www.indiatoday.in/business/story/what-happens-if-you-don-t-link-pan-and-aadhaar-card-today-1785501-2021-03-31

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