Be ready to face hassle in banking services and financial transactions soon, if your Permanent Account Number (PAN) and Aadhaar are not linked. The Income Tax Department earlier extended the deadline till September 30 to link PAN with Aadhaar. The PAN cards which are not linked to Aadhaar would become useless and declared “inoperative" after the deadline.
“If a person fails to intimate the Aadhaar number, the permanent account number allotted to such person shall be made inoperative after the notified date in the manner as may be provided by rules," according to Clause 41 of Section 139AA of the Income Tax Act.
Issued by the Income Tax department, Permanent Account Number is a ten-digit unique alphanumeric number. PAN helps the tax officials to prevent tax evasion and frauds as it is linked to all financial transactions made by an individuals.
To avoid any inconvenience, the banks have started asking customers to link their PAN and Aadhaar details soon. “We advise our customers to link their PAN with Aadhaar to avoid any inconvenience and continue enjoying a seamless banking service," State Bank of India (SBI) mentioned on Twitter.“If not linked, PAN will be rendered inoperative or inactive and cannot be quoted for conducting specified transactions," SBI mentioned.
PAN card is must while opening a bank account, applying for a credit and debit card, starting a demat account among other things. If an individual deposits cash of over ₹50,000 in a day in a bank, PAN is mandatory. Providing PAN details is a must while buying mutual funds, debentures, bonds, etc worth more than ₹50,000. A customer needs to provide PAN details while making a payment of over ₹50,000 in cash during any one day for purchase of bank drafts or pay orders or banker’s cheques from a banking company or a co-operative bank. Apart from these, several other banking services will be affected if PAN card becomes inactive.
SBI has urged the users to go to Income Tax e-filing portal and link PAN and Aadhaar to enjoy “seamless banking services".
In Budget 2021, the Union government has added a new section 234H in the Income Tax Act, where an individual will have to pay a penalty if PAN and Aadhaar are not linked after the deadline ends. So if an individual misses the deadline, he or she will be liable to pay a penalty not exceeding more than Rs 1,000.
“Even though deadline for linking of PAN with Aadhar has been extended to September 30 2021, it’s advisable to completed this linkage as early as possible. Linkage of PAN and Aadhar has lot of benefits like early receipt of refund," said Sujit Bangar, founder Taxbuddy.com.