Income Tax

Aadhaar Mandatory for PAN Application from 1 July 2017

In the past few days, the Government has made numerous announcements regarding Aadhaar and PAN, like making Aadhaar mandatory for IT Returns, linking Aadhaar and PAN, etc. To add to this, a new notification has been issued whereby Aadhaar has been quoted as mandatory while applying for PAN. If you have applied for PAN, then you can quote the 28-digit enrolment ID. Also, the name mentioned in the PAN application form should be the same as the Aadhaar card. New columns have been added to the PAN application Form 49A to state your Aadhaar enrolment ID and your name as per the Aadhaar card. This has been done to prevent the chances of any mismatch in names in PAN and Aadhaar, as many people recently faced problems while linking Aadhaar with PAN. Apart from this, you also have to give proof of date of birth to make an application for PAN. Earlier, only proof of identity and proof of address were required. However, as per the CBDT Notification 56/2017 dated 27 June 2017, from 1 July 2017, you also have to provide proof of date of birth like the birth certificate, matriculation certificate, etc.

Mandatory Aadhaar linking with PAN

All those who have permanent account numbers (PAN) as of 1 July 2017 will have to mandatorily link their PAN with their existing 12-digit biometric Aadhaar number. Even those who are applying for a new PAN will have to link their Aadhaar number or Aadhaar enrolment ID. Aadhaar linked with PAN has been made mandatory for filing tax returns, opening bank accounts and financial transactions above INR 50,000. A notification issued by the Government stated that every person who has been allotted a permanent account number as of 1 July 2017 has to intimate his Aadhaar number as per the provisions of Section 139AA (2) to the Principal Director of Income Tax (Systems) or Director General of Income Tax (Systems) or any person authorised by the said authorities.

Aadhaar has been mandated for filing income tax returns vide the Finance Act of 2017-18. Linking Aadhaar with PAN is expected to prevent tax evasion by using multiple PAN cards. Even the Apex Court of India has upheld the validity of the Income Tax Act provision, making Aadhaar mandatory for the allotment of PAN Cards and ITR filing. However, the Apex Court put a partial stay on the implementation till the Constitution Bench addresses a larger issue related to the right to privacy. Further, the Apex Court has also granted partial relief to persons who neither have Aadhaar nor wish to obtain Aadhaar for the time being that their PAN is not cancelled so that the consequences for not mentioning PAN may not arise.  

Failing to link Aadhaar with PAN will lead to cancellation of the PAN, making it difficult to do transactions. Those who are not required to file income tax returns but have both PAN and Aadhaar are mandatorily required to link them as per Section 139AA.

What happens if you don’t link your Aadhaar with PAN?

If a person fails to link an Aadhaar with a PAN, then the PAN will become inoperative. In such cases, the person will be unable to furnish, intimate or quote his PAN and shall be liable to all the consequences under the Income-Tax Act. The taxpayers were granted time till 30 June 2023 by the Central Board of Direct Taxes (CBDT)¹ to link their PAN with Aadhaar. So, it was mandatory for all taxpayers to complete the linking process as non-compliance would make PAN inoperative from 1 July 2023 onwards. PAN is the only identification number for all transactions in the securities market, so the capital market regulator SEBI has also directed existing investors to link their PAN with their Aadhaar number to continue transacting in the securities market.

What is the reason for linking PAN with an Aadhaar number?

The income tax department came up with the linking of PAN with Aadhaar after it came across instances where multiple PANs were allotted to one person or where one PAN was allotted to more than one person. Linking Aadhaar with PAN was a robust way to de-duplicate the PAN database, so it was made mandatory for taxpayers eligible to obtain Aadhaar to quote their Aadhaar in their application for PAN and return of income.

How do you make payment of the Aadhaar Pan link fee on the e-filing Portal?

Step 1: Visit the e-filing Portal’s Home Page. Click on the ‘Link Aadhaar’ option available under the ‘Quick Links’.

Step 2: Enter PAN and Aadhaar Number

Step 3: Click on ‘Continue to Pay through e-pay Tax’.

Step 4: Enter PAN, confirm PAN and any mobile number to receive OTP.

Step 5: After OTP verification, you will be redirected to the e-Pay Tax page.

Step 6: Click on Proceed on the Income Tax option.

Step 7: Select the relevant AY and Type of Payment as Other Receipts (500) and click ‘Continue’.

Step 8: The applicable amount will be pre-filled against Others. Click Continue.

The challan will be generated. On the next screen, you can select the mode of payment. After selecting the payment mode, the page will be redirected to the Bank website to make payment. After payment of the fee, you can link Aadhaar with your PAN on the e-filing Portal.

How to Submit the Aadhaar PAN link request after Payment of Fee?

Aadhaar PAN link request can be either in the Post login or in the Pre-login mode. The steps for each mode are detailed below.”

Submit Aadhaar PAN link request (Post login)

Step 1: Go to the e-filing Portal. Then log into the Portal. On the dashboard, in the Profile section, a Link Aadhaar to PAN option will be available; click on ‘Link Aadhaar’.

Alternatively, click on Link Aadhaar in the section of personal details.

Step 2: Enter your Aadhaar number and Click ‘Validate”.

Submit Aadhaar PAN link Request (Pre-login)

Step 1: Go to the e-filing portal home page and Click ‘Link Aadhaar’ under the section ‘Quick Links’.

Step 2: Enter the PAN and Aadhaar and click on ‘Validate’.

Step 3: Enter the required mandatory details and click ‘Link Aadhaar’.

Step 4: Enter the 6-digit OTP sent on the mobile number stated in the earlier step and click on ‘Validate’.

Step 5: The request for the link to the Aadhaar has been submitted successfully. Now you can check the Aadhaar-PAN link Status.

Link Aadhaar Status (Pre-login)

Step 1: On the e-filing Portal homepage, click ‘Link Aadhaar Status’ under Quick Links,

Step 2: Enter PAN and Aadhaar number and click View Link Aadhaar Status.

A message regarding your Link Aadhaar Status will be displayed on successful validation. If the Aadhaar-PAN link is in progress:

If the Aadhaar-PAN linking is successful:-

Link Aadhaar Status (Post-Login)

Step 1: Click on ‘Link Aadhaar Status’ on your Dashboard.

Step 2: Alternatively, you can go to My Profile then click on ‘Link Aadhaar Status’

(If your Aadhaar is linked already, the Aadhaar number will be reflected; otherwise, ‘Link Aadhaar Status’ will be reflected.

Note:

• If validation fails, click on ‘Link Aadhaar’ on the Status Page. You will have to repeat the steps to link your PAN and UID.
• Further, if your request to link PAN and Aadhaar is pending with UIDAI for validations, then you will have to check the status later.
• A need may arise to contact the Jurisdictional AO to delink Aadhaar and PAN. Such need may arise if:
• Aadhaar is linked with some other PAN
• PAN is linked with some other Aadhaar.

A message regarding your Link Aadhaar Status will be displayed on successful validation.

Conclusion

Linking Aadhaar with PAN is a significant step taken by the Government to help curb tax evasion through the use of multiple PAN cards. The taxpayers have been granted until 30 June 2023 to link their PAN with the Aadhaar number.

Read our Article: PAN-Aadhaar linking last date extended once again

FAQs

1. https://incometaxindia.gov.in/pages/about-us/central-board-of-direct-taxation.aspx