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    Circular - PAN Aadhar Linking

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    legendry007
    This document from the Central Board of Direct Taxes clarifies the consequences of not linking PAN and Aadhaar numbers by the deadline of March 31st, 2022. It states that PAN numbers will become inoperative if not linked by this date. However, the negative consequences of an inoperative PAN, such as not being able to file returns or get refunds, will only apply from April 1st, 2023. Taxpayers must still pay a late fee for not linking by the deadline. The clarification is meant to provide a smooth transition period as section 234H of the Income Tax Act takes effect regarding inoperative PAN numbers.

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    Circular - PAN Aadhar Linking

    Uploaded by

    legendry007
    13 views2 pages
    This document from the Central Board of Direct Taxes clarifies the consequences of not linking PAN and Aadhaar numbers by the deadline of March 31st, 2022. It states that PAN numbers will become inoperative if not linked by this date. However, the negative consequences of an inoperative PAN, such as not being able to file returns or get refunds, will only apply from April 1st, 2023. Taxpayers must still pay a late fee for not linking by the deadline. The clarification is meant to provide a smooth transition period as section 234H of the Income Tax Act takes effect regarding inoperative PAN numbers.

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    Circular_PAN Aadhar Linking

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    This document from the Central Board of Direct Taxes clarifies the consequences of not linking PAN and Aadhaar numbers by the deadline of March 31st, 2022. It states that PAN numbers will become inoperative if not linked by this date. However, the negative consequences of an inoperative PAN, such as not being able to file returns or get refunds, will only apply from April 1st, 2023. Taxpayers must still pay a late fee for not linking by the deadline. The clarification is meant to provide a smooth transition period as section 234H of the Income Tax Act takes effect regarding inoperative PAN numbers.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    13 views2 pages

    Circular - PAN Aadhar Linking

    Uploaded by

    legendry007
    This document from the Central Board of Direct Taxes clarifies the consequences of not linking PAN and Aadhaar numbers by the deadline of March 31st, 2022. It states that PAN numbers will become inoperative if not linked by this date. However, the negative consequences of an inoperative PAN, such as not being able to file returns or get refunds, will only apply from April 1st, 2023. Taxpayers must still pay a late fee for not linking by the deadline. The clarification is meant to provide a smooth transition period as section 234H of the Income Tax Act takes effect regarding inoperative PAN numbers.

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    © All Rights Reserved
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    of 2

    4/5/22, 2:41 PM

    Consequences of non-furnishing of PAN applicable from 01-04-2023 if PAN


    becomes inoperative: CBDT

    SECTION 139AA OF THE INCOME-TAX ACT, 1961, READ WITH RULE 114AAA OF THE
    INCOME-TAX RULES, 1962 - QUOTING OF AADHAAR NUMBER - CLARIFICATION WITH
    RESPECT TO RELAXATION OF PROVISIONS OF RULE 114AAA PRESCRIBING THE MANNER
    OF MAKING PERMANENT ACCOUNT NUMBER (PAN) INOPERATIVE

    CIRCULAR NO. 7 OF 2022 [F.NO.370142/14/2022-TPL], DATED 30-3-2022

    Instances had come to the notice of the Income-tax Department that multiple permanent account numbers
    (PANs) have been allotted to one person or one PAN has been allotted to more than one person. In order to
    have a robust way of de-duplication of PAN data base, Finance Act, 2017 with effect from 1st April, 2017,
    inserted section 139AA in the Income-tax Act, 1961 (the Act) making it mandatory for a taxpayer who is
    eligible to obtain Aadhaar, to quote his Aadhaar in the application form for PAN and return of income.
    2. Sub-section (2) of section 139AA of the Act makes it mandatory for every person who has been allotted a
    PAN as on 1st July, 2017 to intimate his Aadhaar Number so that the Aadhaar and PAN can be linked. This is
    required to be done on or before a notified date, failing which the PAN shall become inoperative.
    3. Accordingly, in case of failure to intimate the Aadhaar Number by the last extended notified date i.e. 31-3-
    2022, the PAN allotted to the person shall be made inoperative in accordance with the provisions of the Act.
    Further, the Finance Act, 2021 inserted a new section 234H in the Act to complete the process of PAN-
    Aadhaar linking for identifying bogus PANs. This section provides that where a person who is required to
    intimate his Aadhaar under sub-section (2) of section 139AA fails to do so on or before a notified date, he
    shall be liable to pay a fee not exceeding a sum of one thousand rupees, as may be prescribed, at the time of
    making intimation under sub-section (2) of section 139AA after the said date.
    4. Further, rule 114AAA of the Income-tax Rules provides that if PAN of a person has become inoperative, he
    will not be able to furnish, intimate or quote his PAN and shall be liable to all the consequences under the Act
    for such failure. This will have a number of implications such as:
    (i)The person shall not be able to file return using the inoperative PAN
    (ii)Pending returns will not be processed
    (iii)Pending refunds cannot be issued to inoperative PANs
    (iv) Pending proceedings as in the case of defective returns cannot be completed once the PAN is
    inoperative
    (v) Tax will be required to be deducted at a higher rate as PAN becomes inoperative
    4.1 In addition to the above, the taxpayer might face difficulty at various other fora like banks and other
    financial portals, as PAN is one of the important KYC criterion for all kinds of financial transactions.
    5. Hence, in order to have smooth application of section 234H and existing rule 114AAA, it is clarified that
    the impact of sub-rule (2) of rule 114AAA i.e. where a person, whose permanent account number has become
    inoperative under sub-rule (1), is required to furnish, intimate or quote his permanent account number under
    the Act, it shall be deemed that he has not furnished, intimated or quoted the permanent account number, as
    the case may be, in accordance with the provisions of the Act, and he shall be liable for all the consequences
    under the Act for not furnishing, intimating or quoting the permanent account number, shall come into effect
    from 1st April, 2023 and the period beginning from 1st April, 2022 and ending with 31st March, 2023, shall
    be the period during which the said sub-rule shall not have its negative consequences of the nature referred to
    in the said sub-rule or specified in paras 4 and 4.1 above. However, the taxpayer shall be liable to pay a fee in
    accordance with sub-rule (5 A) of rule 114.
    Shefali Singh
    Under Secretary (TPL-IV), CBDT

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