It is compulsory to link your PAN with Aadhaar Card. Even Supreme Court has not objected to it. Do it before June 30, 2018, to avail of the benefits. If you do not, you need to know about the complications it may bring to you.
At present, there is no penalty for not linking the PAN with your Aadhaar card, but you will not be able to do transactions via IT portal or avail a lot of services where linking is required. However, the IT department could treat you a violator of their terms and conditions, and could suitably penalize you. It could be minimum Rs.5,000 if you do not submit your ITR by July 31st.
As per a Government of India notification, “Every person who has been allotted permanent account number as on the 1st day of July 2017, and who in accordance with the provisions of sub-section (2) of section 139AA is required to intimate his Aadhaar number, shall intimate his Aadhaar number to the Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems) or the person authorised by the said authorities.”
The Supreme Court in an interim judgement has already stated that those who possess Aadhaar card must link their existing PAN cards with Aadhaar. It is still in the process of concluding the hearing on the aadhaar and PAN cards linkage etc, through its 5-judges bench.
In our country, a PAN card is treated as a prerequisite for paying taxes. PAN is a valid KYC requirement for the individual bank accounts, linking the Aadhaar with PAN will automatically link an individual’s Aadhaar with his/her bank accounts. This will make it easier for the Income Tax Department to track everyone’s transactions, and the tax they should be paying.
To finance an illegal activity such as drug trafficking can be done easily with dubious or unverified identities. If and when a PAN card will be linked to an Aadhaar card, it will altogether eliminate the possibility of these nefarious activities.
Also Read: Aadhaar Virtual ID to be accepted from July
Every taxpayer in the country needs a PAN card to file his or her income tax returns(ITR). It has now been made mandatory to provide Aadhaar Card details too while filing IT returns. Aadhaar and PAN card will enable individuals to file their returns on the portal of the income tax department. If you do not link your Aadhar card with your PAN, you would not be able to file online ITR. On the other hand, If you have done it already, you are not required to send acknowledgements to the IT department.
If you have already updated your PAN number with your bank account, and possess an aadhar card too, there is no way you would be exempted to link with the income tax department too. Even if, you have lesser income than the taxable income limit. Sometimes, at banks or other places, they deduct your TDS at the source. In this case, you will not be entitled to a refund of this TDS amount.
However, you can claim this refund, if you file your income tax returns via a portal or otherwise because it can validate your claim. As you are aware anytime from now, if and when you file your income tax returns, you will have to provide your Aadhar number to the IT department and hence both Aadhar and PAN are linked
At present, there is no penalty for not linking the PAN with your aadhar card, but you will not be able to do transactions via IT portal or avail a lot of services where linking is required. The department could treat you a violator of their terms and conditions, and could suitably penalize you.