Why the government mandates linking Pan card with Aadhaar

• PAN will not operate if not linked with Aadhaar by March 31, 2020.
  
  
• The government says that more than 17 crore PANs across the country remain to be linked with Aadhaar.
  
  
• The present deadline for linking PAN with Aadhaar is March 31, 2020 after which PAN will operate only when linked with Aadhaar.
  
  
• Here we discuss why the government mandates linking PAN with Aadhaar and why the PAN will become inactive.

In the 2017 budget, the union government made it mandatory to link every individual’s Aadhaar with PAN. Also while issuing a verdict that upheld the constitutional validity of Aadhaar in September 2018, the Supreme Court of India said Aadhaar cannot be made mandatory for opening a bank account or to get mobile connection. However, linking Aadhaar with PAN is mandatory.

The apex court also said Aadhaar is mandatory for filing Income Tax Return (ITR).

Earlier deadlines to link Aadhaar and PAN

The Income Tax Department has said that PAN will go inactive if not linked with Aadhaar by March 31, 2020. The deadline to link Aadhaar with PAN was extended quite a few times during last year. Earlier, the deadline to link Aadhaar with PAN was September 30, 2019. In a notification issued on September 28, 2019, the government extended this deadline to December 31, 2019. Subsequently, the deadline was further pushed to March 31, 2020. These extensions come as a relief to those who have not still linked their Aadhaar with PAN.

What the CBDT says

Issuing a statement connected to linking Aadhaar with PAN, the Central Board of Direct Taxes (CBDT) said, “Whether a person, who has been allotted the permanent account number as on July 1, 2017 and is required to intimate his Aadhaar number under sub-section (2) of Section 139AA, has failed to intimate the same on or before March 31, 2020, the permanent account number of such person shall become inoperative immediately after the said date for the purpose of furnishing, intimating or quoting under the Act”.

Also through a notification, the CBDT has amended the Income Tax Rules and has inserted Rule 114AAA, which detailed the “manner of making permanent account number inoperative”.

What are implications of PAN becoming inactive

Section 133 AA (2) of the Income Tax Act states that every individual having PAN as on July 2017 and eligible to obtain Aadhaar, must intimate his Aadhaar number to the tax authorities.

The notification has also mentioned that individuals, whose PANs will become inactive will be held liable for all the consequences under the IT Act for not furnishing, intimating or quoting the permanent account number.

If the Aadhaar is linked with the PAN on a later date after the deadline, the PAN will turn active from the date of intimating the Aadhaar number to the department.

How to link Aadhaar with PAN

If you are already filing ITR (Income Tax Return), it is most likely that your Aadhaar is already linked with PAN. To link your Aadhaar with PAN, you can either send an SMS or do it through the e-filing website or by manually filling up a form designated for this purpose and made available at the PAN service center.