Earlier Income tax department had extended the due date for linking Aadhar and PAN to 31.03.2022 from 30.09.2021. To read more CLICK HERE: Government extends certain timelines i.e. PAN-Aadhar linking and penalty proceedings to ease compliances – Taxontips
Hence, only one week is left for people to link their Aadhar and PAN and so let’s check what will happen if people don’t link their PAN and Aadhar till the due date.
Let’s first understand who needs to link their PAN and Aadhar:
As per sub section 2 of section 139AA ” Every person who has been allotted permanent account number as on the 1st day of July, 2017, and who is eligible to obtain Aadhaar number, shall intimate his Aadhaar number to such authority in such form and manner as may be prescribed, on or before a date to be notified by the Central Government in the Official Gazette:
Provided that in case of failure to intimate the Aadhaar number, the permanent account number allotted to the person shall be [made inoperative after the date so notified in such manner as may be prescribed.”
Now let’s understand who is eligible to get Aadhar number:
As per notification issued by UIDAI (the authority issuing Aadhar number) on 06.04.2017 a person eligible to obtain Aadhar number would only be a resident individual and hence the requirement to link Aadhar with PAN and quoting of Aadhar in return of Income would only apply to Resident Individual.
Thus, on going through above study it is clear that Non-resident individuals are not required to link their Aadhar with PAN or quote the Aadhar in return form but at the same time individual who have become resident in India have to obtain Aadhar and link it with their PAN.
Penalty for not linking PAN and Aadhar: Section 234H
Not linking PAN and Aadhar could lead to a penalty of Rs. 1,000 u/s 234H.
Section 234H is as under:
“Without prejudice to the provisions of this Act, where a person is required to intimate his Aadhaar number under sub-section (2) of section 139AA and such person fails to do so on or before such date, as may be prescribed, he shall be liable to pay such fee, as may be prescribed, not exceeding one thousand rupees, at the time of making intimation under sub-section (2) of section 139AA after the said date.”
Although penalty of Rs. 1,000 under section 234H is not a mandatory penalty/ fees but this could be levied when you go for linking PAN and Aadhar after due date.
Higher TDS rates if a person doesn’t link his Aadhar with PAN:
As per Rule 114AAA of Income Tax rules, if a person doesn’t link his PAN with Aadhar, PAN will become inoperative which will be as good as not having PAN and then by virtue of section 206AA, the deductor would deduct TDS at a higher rate and in addition to this one would not be able to claim the credit of such TDS deducted.
How can one save themselves from deduction of Higher TDS:
There are two ways to save oneself from getting TDS deducted at a higher rate:
- To Link PAN and Aadhar before 31.03.2022.
- Use Aadhar everywhere i.e. filing of return of income or giving Aadhar for TDS deduction instead of PAN as now PAN and Aadhar are interchangeable. However assessee who have GST registration are advisable to link PAN and Aadhar or it could lead to issues in GST also.
How to link PAN and Aadhar:
To link PAN and Aadhar you can visit the below mentioned link and simply mention the details and link Aadhar and PAN.
Weblink to Link Aadhar and PAN: Income Tax Portal, Government of India Link Aadhar Page
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