PAN-Aadhaar Link Deadline: What Happens To Tax Refund When A PAN Becomes Inactive?

Your Permanent Account Number (PAN) is linked to your Aadhaar number as part of the Aadhaar PAN connection procedure.For the purposes of assessing income taxes, the Income Tax Department of India issues PANs, which are 10-digit alphanumeric numbers, to both persons and businesses. Residents of India are given Aadhaar, a 12-digit unique identity number, by the Unique identity Authority of India (UIDAI).

PAN and Aadhaar Number Linking

With effect from July 1, 2017, everyone who is qualified to receive an Aadhaar must reference their Aadhaar number while registering for a PAN or filing an income report, in accordance with section 139AA of the Income-tax Act, 1961.

If a person has applied for an Aadhaar card but does not yet have an Aadhaar number, they may reference the Enrolment ID from their Aadhaar application form in their ITR.

Latest PAN-Aadhaar Link

As of June 30, 2023, PAN and Aadhaar may now be linked one last time. On March 30, 2023, the Central Board of Direct Taxes (CBDT) made the extension announcement.

Prior to this date, the PAN and Aadhaar linkage deadline was March 31, 2023. To provide taxpayers additional time to connect their PAN with Aadhaar, the government extended the deadline by three months.

The PAN of taxpayers who have not provided their Aadhaar as necessary will no longer be active as of July 1, 2023, and the following repercussions will apply while this is the case:

No reimbursement would be given for such PANs.

– For the time that the PAN is inactive, no interest will be charged on the return; and

– As stated in the Act, TDS and TCS must be withheld from/collected at a greater rate.

– The PAN may be made operational once again in 30 days by notifying the appropriate authorities and paying a cost of Rs. 1,000.

Reasons Why It Is Important To Link Your PAN Card To Your Aadhaar

You won’t be able to provide, intimate, or cite your PAN if it stops working, and you’ll be responsible for any penalties as a result.

This will have a variety of effects, including:

1. Using the invalid PAN will prevent you from filing a return.

2. No processing will be done for pending returns

3. Inactive PANs cannot receive pending reimbursements.

4. Once the PAN is no longer active, pending processes, such as those involving faulty returns, cannot be concluded.

5. As PAN becomes inactive, tax will need to be withheld at a greater rate.

People who have been exempted from PAN-Aadhaar connection are not subject to the aforementioned penalties. This group comprises people who live in certain States, people who aren’t considered residents under the Act, people who aren’t Indian citizens, and those who were at least 80 years old at some point in the preceding year.





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