PAN-Aadhaar Linking Deadline Passed: Inactive PAN Cards and Impacted Transactions Explained

The deadline for linking PAN and Aadhaar cards was June 30th. Starting from July 1st, any PAN card that remains unlinked will be rendered inactive, according to the information provided by the Income Tax department. In order to reactivate an inactive PAN, you must inform the relevant authorities within 30 days and pay a fee of Rs.1,000. To accomplish this, you need to visit the National Securities Depository Limited (NSDL) website and make the payment using Challan No. ITNS 280, with Major Head 0021 (Income Tax Other than Companies) and Minor Head 500 (Other Receipts). However, what are the implications on transactions if PAN is not linked to Aadhaar?

Transactions affected due to failure in linking PAN-Aadhaar:

Inability to open a bank account.
Inability to apply for a new debit or credit card.
Inability to deposit more than ₹50,000 in a day in any banking company or cooperative bank.
Non-interchangeability of PAN and Aadhaar details, which includes cases like:
- Cash transactions of more than ₹50,000 at hotels or for foreign travel bills.
- Requirement of PAN card details for purchasing an immovable property worth more than ₹10 lakh.
- Purchase of mutual funds units exceeding Rs.50,000.
- Purchase of a bank draft or pay order in cash exceeding Rs.50,000 in a day.
According to Rule 114AAA of the Income-tax Rules, if your PAN expires or becomes invalid:
- Refunds pending for the inactive PAN will not be issued.
- Pending income tax returns cannot be processed.
- Liability to pay higher taxes.
- Inability to complete any pending processes, such as those involving faulty returns, after the PAN becomes non-functional.

Filing income tax returns (ITR) is still possible without linking PAN and Aadhaar. However, the tax department will not process your return until the two are linked.

Benefits of linking Aadhaar-PAN:

Linking your PAN with Aadhaar offers protection against potential fraud by preventing others from obtaining multiple cards in your name. The integration of PAN and Aadhaar enables the Income Tax department to effectively identify and address instances of tax evasion. Additionally, the process of filing income tax returns (ITRs) becomes more streamlined, as taxpayers are no longer required to provide additional proof of filing their returns.