According to the Income Tax department, PAN-Aadhaar linking is possible even after March 31, 2020. Though, there’s a catch here, this linking is possible on the condition that the PAN will remain in-operative post the deadline till the date they link the two cards.
The Central Board of Direct Taxes (CBDT) has issued a new notification inserting changes in the Income Tax Rules, 1962. The latest amendment brings in sub-section 114AAA to be inserted after rule 114AA of the Income Tax Rules, 1962. The new changes enlist the consequences of PAN-Aadhaar linking not being completed before March 31, 2020.
The sub-section 114AAA on “Manner of making permanent account number inoperative” says, “(1)Where a person, who has been allotted the permanent account number as on the 1st day of July, 2017 and is required to intimate his Aadhaar number under sub-section (2) of section 139AA, has failed to intimate the same on or before the 31st day of March, 2020, the permanent account number of such person shall become inoperative immediately after the said date for the purposes of furnishing, intimating or quoting under the Act.”
This situation will be interpreted as if you have never possessed a PAN and any financial transactions requiring the PAN won’t be permitted. As per the notification released on February 13, if an individual’s PAN becomes inoperative because it has not been linked with the Aadhaar by March 31, it shall be considered that the person has not furnished their PAN where they were required to do so.
The notification further stated, “(2)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”.
If the person links the PAN and Aadhaar after March 31, then as per section 139AA of the Income Tax Act, 1961, his PAN will become operative from the date of intimation of Aadhaar number for furnishing, intimating, or quoting under the Income Tax Act.
The notification clearly states, “(3) Where the person referred to in sub-rule (1) has intimated his Aadhaar number under sub-section (2) of section 139AA after the 31st day of March, 2020, his permanent account number shall become operative from the date of intimation of Aadhaar number for the purposes of furnishing, intimating or quoting under the Act and provisions of sub-rule (2) shall not be applicable from such date of intimation”.
If the linking of both cards is not done before March 31, 2020 then the person won’t be able to perform a minimum of 18 financial transactions. These transactions include sale or purchase of vehicle, applying for debit or credit cards, filing income tax return and among others. Individuals can easily link the PAN with Aadhaar by sending an SMS by visiting the e-filing website or by visiting the assigned PAN service center.