According to the Income Tax Act, 1961, all PAN holders who are not exempt must link their PAN to Aadhaar.

The Consequences

The deadline to link Aadhaar card with PAN by paying a late fee of ₹1,000 was June 30. If you have not linked them by then, you will not be able to access certain income tax-related services.

Users who have failed to link their PAN to Aadhaar will have their PAN declared inoperative. This means that the tax deducted at source (TDS) and tax collected at source (TCS) will be deducted at a higher rate.

What to Do Now

If your PAN has become inoperative, you can activate it by paying a fine. Simply log on to the National Securities Depository Limited (NSDL) portal and make the payment under Challan No. ITNS 280, with Major Head 0021 (Income Tax Other than Companies) and Minor Head 500 (Other Receipts).

You can still file your income tax returns (ITR) even if your PAN and Aadhaar are not linked. However, the IT department will not process your return until the two are linked.

Why Link PAN with Aadhaar?

Linking your PAN with Aadhaar protects you from fraudsters who may obtain multiple cards using your name. Additionally, once a taxpayer’s PAN is linked with Aadhaar, the Income Tax Department can detect any form of tax evasion. This simplifies the process of filing ITRs, as taxpayers no longer need to provide proof of filing their returns.

Please note that this information is provided as a general guideline and it is recommended to consult official sources or a tax professional for specific instructions regarding your PAN and Aadhaar linking.