The Central Board of Direct Taxes (CBDT) had recently extended the deadline to link Permanent Account Number (PAN) with Aadhaar number to June 30, 2021, due to the difficulties posed by the ongoing Covid pandemic. So now as the deadline is fast approaching, here are some guidelines which must be kept in mind.
As per the new Section 234H of the Income-tax Act 1961, which has been recently introduced during Budget 2021, the PAN cards which are not linked to Aadhaar after June 30, 2021, would be declared “inoperative”, as well as a penalty of Rs 1,000 may also be imposed. On the other hand, the person will be considered as an individual without a PAN card.
Difficulties to be faced by not linking PAN and Aadhaar
- The KYC status will become invalid since PAN is a must for one’s KYC.
- An inoperative PAN card will have an effect on one’s bank account because that account will become an account without a PAN card.
- And in that case, if the bank account holder gets interested on savings above Rs. 10,000 then the TDS (Tax Deduction at Source) rate levied will be double i.e. 20 per cent. The TDS levied on bank account with PAN card is 10 per cent.