According to the Income Tax Department, as per the Income Tax Act, 1961, all the citizens who are not exempted must link their PAN card with their Aadhaar card. And the deadline to do so is March 31 next year. All those PAN cards will become obsolete from April 1, 2023 if this linkage is not done.
However, citizens of some regions of the country are being exempted from this obligation. According to a notification issued by the Union Finance Ministry in May 2017, the exemptions include residents of the states of Assam, Jammu and Kashmir and Meghalaya. However, if PAN-Aadhaar is not linked in case of rest, the PAN card will be deactivated.
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A directive issued by the ‘Central Board of Direct Taxes’ (CBDT) on March 30 said that if the PAN becomes inactive, the person concerned may face severe penalties under the Income Tax Act.
In that case the taxpayer cannot file the IT return. Pending returns will not be completed as those returns cannot be issued on inactive PAN cards. Not only that, the necessary process cannot be initiated to correct those income tax returns that contain informational errors. This results in the tax payer having to pay a much higher rate of tax.
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Not only this, the taxpayer has to face difficulties in banking and other financial transactions. Because PAN card is one of the most important documents for KYC.
Incidentally, the regulatory body for issuing Aadhaar card is the ‘Unique Identification Authority of India’. A unique number is assigned by the regulatory body to every Indian citizen. PAN Card is issued there by Income Tax Department. It is a 10 digit number issued to an individual, organization, organization or any other entity.