You will have to shell out penal charges of Rs 500 to Rs 1,000 if you fail to link your Permanent Account Number (PAN) and Aadhaar within two days. March 31 is the deadline for completing this exercise.
Penalty for failure to seed PAN with Aadhaar by March 31
The Central Board of Direct Taxes (CBDT) has decided to impose a fine of Rs 500 if you miss this deadline, but complete the seeding process within three months – that is, by June 30, 2022. If you are unable to do so, you will be charged double the penal fee.
Also read: Money matters that need your attention before March 31
Non-linked PAN to be inoperative after March 31
Moreover, your PAN will become inoperative after March 31, 2022 if the linking process is not complete. You can re-activate your PAN after paying the penal charges of Rs 500 or Rs 1,000, as applicable, the income tax department’s circular stated.
Any failure may lead to the PAN becoming inoperative, which means that a person had no PAN for income-tax purposes. It is advisable for tax payers to check their income tax portal and ensure that the Aadhaar and PAN are linked. NRIs may have some concerns since in some cases they do not have Aadhaar,” said Amit Maheshwari, Tax Partner, AKM Global, a tax and consulting firm.
Consequences of non-compliance
Not completing the linking process and inoperative PAN can be catastrophic for the entire gamut of your financial transactions. “For one, you will not be able to file your income tax returns without the PAN,” says chartered accountant Karan Batra, Founder, Chartered Club. This will be applicable from the assessment year 2022-23. Also, your mutual fund SIP transactions will not go through. Markets regulator Securities and Exchange Board of India (SEBI) had earlier said that investments of only those investors whose PAN is mapped to Aadhaar will be operational. You will not able to open a new broking or demat account unless your PAN and Aadhaar are linked.
