Linking PAN and Aadhaar – Consequences of Non-Compliance and Possible Solutions 2023

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The deadline for linking PAN and Aadhaar is fast approaching, and if you haven’t linked them yet, you could face serious consequences. In this article, we’ll go over the details of this law and what will happen if you don’t link your PAN and Aadhaar by March 31, 2023. We’ll also look at the problems taxpayers are facing in linking their PAN to Aadhaar and what the government can do to solve them.

What is Aadhaar Card?

Aadhaar is a 12-digit unique identification number issued by the Indian government to residents of India. It is a biometric document that contains a person’s name, address, date of birth, and biometric data such as fingerprints and iris scans. The Aadhaar card is used as a proof of identity and address for various purposes, including opening bank accounts, applying for government schemes and subsidies, and filing income tax returns.

What is PAN Card?

PAN (Permanent Account Number) is a 10-digit alphanumeric number issued by the Income Tax Department of India. It is used as an identification number for all financial transactions, including opening a bank account, filing income tax returns, and making investments. The PAN card contains a person’s name, photograph, date of birth, and PAN number.

Why You Need to Link Your PAN and Aadhaar

As of March 31, 2023, if your PAN and Aadhaar are not linked, your PAN will become inactive. This means you won’t be able to file your income tax returns or receive refunds. If TDS is applicable to you, it will be deducted at the maximum rate until your PAN is activated again. The Securities and Exchange Board of India (SEBI) has also issued instructions that if PAN and Aadhaar are not linked by March 31, 2023, you may face problems in investing. Additionally, your GST number is generated from your PAN, so if your PAN becomes inactive, there could be trouble there as well.

What You Need to Do

If your PAN and Aadhaar are not linked by March 31, 2023, you could face serious consequences. To avoid this, you need to link them before the deadline. If you’re facing difficulties in linking them due to discrepancies in the data, try to obtain the necessary documents to correct the data. If that’s not possible, enter the date of birth as recorded on your PAN card when linking with Aadhaar.

Importance of Linking Aadhaar and PAN Cards

Linking PAN and Aadhaar is important for several reasons. Firstly, it helps the government to curb tax evasion by identifying individuals who may have multiple PAN cards. Secondly, it helps in identifying individuals who may be using fake or invalid PAN cards. Thirdly, it helps in identifying individuals who may be eligible for government schemes and subsidies. Finally, it helps in streamlining the process of income tax returns.

Consequences of Non-Compliance

Penalties

Individuals who do not link their PAN and Aadhaar can face penalties of up to Rs. 1,000. The penalty may be imposed at the time of filing income tax returns.

Invalid PAN Card

If an individual does not link their PAN and Aadhaar, their PAN card may become invalid. This means that the individual will not be able to use their PAN card for any financial transaction.

Delayed Tax Refunds

Individuals who do not link their PAN and Aadhaar may face delayed tax refunds. The income tax department may take longer to process tax refunds if the Aadhaar and PAN cards are not linked.

Loss of Benefits and Subsidies

Individuals who do not link their PAN and Aadhaar may lose out on government benefits and subsidies. For example, an individual may not be able to receive a subsidy on LPG cylinders if their PAN and Aadhaar are not linked.

Common Issues While Linking Aadhaar and PAN Cards

While linking Aadhaar and PAN cards, individuals may face some common issues. These include:

Mismatch of Name and Date of Birth

Sometimes, individuals may face a mismatch of name and date of birth while linking PAN and Aadhaar. This can happen if the name and date of birth on the PAN and Aadhaar do not match. To resolve this issue, individuals can update their details on either the Aadhaar or PAN card to ensure that both cards have matching details.

Online Technical Glitches

Some individuals may face technical glitches while linking their PAN and Aadhaar online. This can happen due to slow internet connectivity, server issues, or errors in the online portal. In such cases, individuals can try linking their cards again after some time or contact the helpline provided by the income tax department.

Possible Solutions to Link Aadhaar and PAN Cards

One of the biggest reasons why many people have not linked their PAN and Aadhaar yet is because the data entered in Aadhaar at the time of issuance was slightly different from PAN. This could be due to differences in the spelling of name and surname or date of birth. While the name in Aadhaar can be corrected from the PAN card, correcting the date of birth in Aadhaar requires a birth certificate, passport, or mark sheet of the authorized board or university. Many people, especially older individuals, may not have these documents, making it difficult for them to link their PAN and Aadhaar.

The government has given taxpayers ample time to link their PAN and Aadhaar and has even introduced a late fee for those who link them after the deadline. However, there are still cases where genuine difficulties exist, such as discrepancies in the date of birth, and these individuals may need some relaxation in the rules to link their PAN and Aadhaar.

Linking Online

The income tax department provides an online portal for individuals to link their Aadhaar and PAN cards. To link online, individuals need to visit the income tax e-filing website and enter their PAN and Aadhaar details.

Linking Through SMS

Individuals can also link their PAN and Aadhaar through SMS. To link through SMS, individuals need to send an SMS to the designated number provided by the income tax department.

Linking Through Offline Mode

Individuals can also link their PAN and Aadhaar through offline mode by visiting their nearest PAN service center or NSDL office. They need to fill in the necessary forms and submit them along with their Aadhaar and PAN cards.

Frequently Asked Questions

Is it mandatory to link Aadhaar and PAN cards in India?

Yes, it is mandatory to link Aadhaar and PAN cards in India.

What are the consequences of non-compliance?

Non-compliance can lead to penalties, invalid PAN cards, delayed tax refunds, and loss of benefits and subsidies.

What are some common issues faced while linking Aadhaar and PAN cards?

Some common issues include mismatch of name and date of birth and online technical glitches.

How can individuals link their Aadhaar and PAN cards?

Individuals can link their Aadhaar and PAN cards online, through SMS, or through offline mode.

What is the deadline for linking Aadhaar and PAN cards?

The deadline for linking Aadhaar and PAN cards is March 31, 2023.

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