In today's world, it has become almost impossible to complete any financial transaction without a PAN card and an Aadhaar card. This is why the government decided to link PAN cards with Aadhaar cards.
New Delhi: Linking PAN card and Aadhaar for financial transactions has become mandatory. The central government has directed all citizens to link their PAN cards with Aadhaar. However, many people have yet to comply. The government has clarified that failure to link your PAN with Aadhaar and continued use of an inactive PAN can result in hefty penalties. Under Section 272B of the Income Tax Act, a penalty of up to ₹10,000 can be levied for each such transaction.
Why is PAN-Aadhaar Linking Necessary?
The purpose of PAN-Aadhaar linking is to prevent tax evasion and increase financial transparency. A PAN card is issued by the Indian government for identification in financial transactions and tax-related activities, while an Aadhaar card serves as proof of an individual's biometric and basic information. The government implemented this measure to ensure accurate identification and control black money. A PAN card without Aadhaar linkage is declared inactive, rendering it invalid for financial transactions.
Risks and Penalties of an Inactive PAN Card
If your PAN card is not linked to your Aadhaar, it will become inactive. This means you will be unable to perform financial transactions such as opening or operating a bank account, investing in shares, purchasing mutual funds, buying property, applying for loans, and filing income tax returns.
The Income Tax Department has clarified that individuals using an inactive PAN can face a penalty of up to ₹10,000 for each financial transaction. This penalty is imposed under Section 272B. The aim of this rule is to make PAN-Aadhaar linking mandatory.
Possessing Two PAN Cards is Also Illegal
Some people, intentionally or unintentionally, obtain two PAN cards. This is illegal. If a taxpayer is found to possess two PAN cards, they must surrender one. Failure to do so may result in penalties.
The government has provided a facility to surrender an extra PAN card under 'Correction in existing PAN data'. This requires an online application. If possessing two PAN cards was unintentional, and a valid reason is provided, the penalty may be waived.
How to Link PAN and Aadhaar?
Linking PAN to Aadhaar is straightforward. It can be done through the Income Tax Department's website or the mobile app provided for user convenience.
Simply enter your PAN number, Aadhaar number, and name correctly. After linking, your PAN will be declared active. The government periodically announces a deadline for this; after the deadline, PAN cards are deactivated.
