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Aadhaar PAN Linking: Govt Collecting Crores as Penalty from Taxpayers!
Moneylife Digital Team 15 November 2024
Economy & Nation
While several reports ask taxpayers to link their permanent account number (PAN) with Aadhaar before 31 December 2024, the actual deadline to do so is already over. In fact, from 1 July 2023, PANs not linked with Aadhaar became inoperative. Since then, the Union government has been collecting Rs1,000 as a penalty for linking inoperative PAN with Aadhaar, according to information provided to the Parliament. 
 
During the past seven months till 31 January 2024, the government collected Rs601.97 crore as penalty from PAN-holders, the Lok Sabha was informed. In a separate reply in the Rajya Sabha, Pankaj Chaudhary, minister of state for finance, says, "Total number of people who have paid Rs1,000 for linking Aadhaar with PAN during the period from 1 July 2022 to 30 November 2023 is 2.125 crore. Total amount collected from these people is Rs2,125 crore." 
 
Section 234H of the Income-Tax (I-T) Act,1961 provides that where a person who is required to intimate his Aadhaar under sub-section (2) of Section 139AA and fails to do so on or before a prescribed date, he shall be liable to pay a fee of up to Rs1,000 and 30 June 2023 has been notified as the last date for linking Aadhaar to PAN.
 
Further, 139A of the I-T Act prescribes various conditions under which an assessee is required to obtain a PAN. One such condition makes PAN and Aadhaar interchangeable for I-T purposes. "(a person)...who been allotted a PAN, and who has linked his Aadhaar number with PAN as per section 139AA, may furnish his Aadhaar number in lieu of a PAN for all the transactions where quoting of PAN is mandatory as per I-T Act," the tax department says.
 
In April this year, the central board of direct taxes (CBDT) issued a circular acknowledging concerns raised by taxpayers regarding notices for short-deduction or collection of tax deducted at source (TDS) or tax collected at source (TCS) due to inoperative PANs during transactions.
 
While extending the date for linking PAN and Aadhaar up to 31 May 2024 for transactions entered into up to 31 March 2024, CBDT says, "With a view to redressing the grievances faced by such deductors or collectors, the Board, in partial modification and in continuation of the Circular No3 of 2023, hereby specifies that for the transactions entered into upto 31 March 2024 and in cases where the PAN becomes operative (as a result of linkage with Aadhaar) on or before 31 May 2024, there shall be no liability on the deductor or collector to deduct or collect the tax under section  206AN206CC, as the case maybe, and the deduction or collection as mandated in other provisions of Chapter XVII-B or Chapter XVII-BB of the Act, shall be applicable."
 
As of March 2024, there were over 740mn (million or 74 crore) PAN card-holders in India and over 605mn were linked with Aadhaar. Last year in November, responding to a query filed under the Right to Information (RTI) Act, the CBDT stated that 115mn PAN cards were deactivated for not being linked to Aadhaar.
 
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Comments
Gupta10
3 weeks ago
As NRI, I'm not required to have Aadhar. Nevertheless, I applied in 2023 due to the constant demand for aadhar by everyone in India. I got one after the PAN linking deadline, which wasn't applicable to NRIs anyway. But IT department kept sending nasty reminders every day to link aadhar, despite knowing I'm NRI. On trying to voluntarily link the Aadhar even if it is not required legally, the IT department systems insisted I have to pay penalty first for the "delay". Strange given that I got an Aadhar card only after the deadline and linking is not required for NRIs. Nevertheless, I even paid this 1000 penalty for committing no crime. I thought now it will get done. But no, after trying to link the Aadhar almost 10 times, it fails every time saying that the data on Aadhar does not match with PAN. I have both the cards and they have identical spellings of my name, identical birthdays etc. I can't spot any difference. It has been another year since then. Penalty paid, aadhar still not linked.
Reply
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