How to Link PAN to Aadhar on Income Tax Portal?

As higher income attracts higher taxes, some people have got multiple PAN cards issued in their names to divide total income under different PANs to avoid paying higher taxes. To prevent this malpractice and to avoid cases where the same PAN is issued to more than one individual, the government has taken the decision to link the instrument with Aadhaar, which is unique for an individual.

What is a PAN card?

A PAN card is a physical card issued by the Income Tax Department containing the Permanent Account Number of the cardholder. 

Different taxpayers of a country are issued pan cards by the Income Tax department. A PAN card issued to individuals contains the individual’s name, DOB, photograph, father’s or spouse’s name, signature etc. At the same time, a PAN card issued to companies has the company’s name on it along with the registration date, QR code, date of issue of PAN etc.

What is an Aadhar Card? 

Aadhaar card is a unique 12-digit identification number issued by the Indian government to residents of India. The Aadhaar card contains an individual’s demographic and biometric information, such as their name, address, date of birth, and fingerprints or iris scans, which are used to authenticate their identity for various government and private services. The Aadhaar card was introduced by the Indian government in 2009 with the aim of providing a universal identity infrastructure for all residents of India.

It enables individuals to access various services provided by banks, mobile phone operators, and government/non-governmental organizations. Additionally, it allows cost-effective online verification of demographic information and eliminates duplicate and fake identities in government and private databases. The number is randomly generated without any classification based on caste, creed, religion, or geography.

What is PAN-Aadhaar linking?

It is the process of linking one’s PAN with his/her Aadhaar number. As Aadhaar contains a person’s biometrics, it’s next to impossible for an individual to get more than one Aadhaar in his/her name using the same biometrics – like fingerprints and iris, while without such parameters, an individual may get more than one PAN issued in his/her name by giving different addresses, communication details etc. PAN-Aadhaar linking will therefore ensure an individual uses only one PAN as going forward unlinked PANs will become inactive.

Linking of PAN with Aadhar

According to the Income-tax Act, 1961, individuals who are eligible for Aadhaar are required to quote their Aadhaar number while applying for PAN or filing their income tax returns, effective July 1, 2017. If an individual has applied for an Aadhaar card but doesn’t have the Aadhaar number, they can quote the Enrolment ID of their Aadhaar application form in the ITR.

Furthermore, Section 139AA states that individuals who were allotted a PAN on or before July 1, 2017, and are eligible for an Aadhaar number must link their Aadhaar number with their PAN by the stipulated deadline, as extended from time to time or their PAN will become inoperative. If PAN becomes inoperative due to non-linking with Aadhaar, all the consequences provided under the Income-tax Act for not furnishing or quoting PAN will come into effect from April 1, 2023. However, individuals will be liable to pay a fee if they link their PAN with Aadhaar between April 1, 2022, and June 30, 2023.

Who does not require linking PAN with Aadhar?

Apart from the artificial persons, who don’t have Aadhaar due to lack of required biometrics, according to the Department of Revenue Notification no 37/2017 dated May 11 2017, the following persons are exempted from Aadhaar-PAN linking –

• NRIs;
• Not a citizen of India;
• Over 80 years of age as on date i.e., a super senior citizen; and
• State of residence is Assam, Meghalaya or Jammu & Kashmir.

What is the time limit for linking PAN and Aadhaar?

In order to clean the PAN database of duplication problems, Finance Act, 2017 inserted section 139AA in the Income-tax Act, 1961 with effect from April 1, 2017, making it mandatory for a taxpayer who is eligible to obtain Aadhaar, to quote his/her Aadhaar in the application form for PAN and in his/her ITR (Income Tax Return).

Moreover, according to sub-section (2) of section 139AA, the PAN of a person shall become inoperative if it is not linked with his/her Aadhaar Number on or before a notified date. 

The Central Board of Direct Taxes (CBDT), however, through its Notification No.17/2022 dated March 29, 2022, provided a window of opportunity up to March 31 2023, to the taxpayers, who missed the March 31, 2022 deadline and the deadline is furthermore extended to June 30 2023, However, If PAN and Aadhaar cards are not linked by June 30, the PAN card will be deemed inactive, and the following consequences will apply:

• Refunds will not be processed for such PANs;
• Interest on any such refunds will not be paid for the period in which the PAN remains inactive; and
• TDS and TCS will be deducted or collected at a higher rate, as specified in the Income Tax Act.

How to Link PAN with Aadhaar

Linking process

There are various options to link PAN with Aadhaar – such as online, offline, through SMS etc.

Online linking

PAN and Aadhaar may be linked online through –

1. Income Tax e-filing portal
2. NSDL portal
3. UTIITSL portal

A taxpayer may complete the linking process by visiting and filling in the required information – such as PAN, Aadhaar Number, Name as per Aadhaar, and Date/Year of Birth through the applicable link provided on the respective website.

Offline linking

• Offline linking of PAN with Aadhaar may be done by visiting the designated PAN service center of PAN service provider NSDL eGov or UTIITSL.
•  A PAN holder has to fill out the prescribed form and submit it to the designated PAN service center along with copies of PAN card and Aadhaar card.
•  After paying the prescribed fee, linking may be done through Aadhaar biometric authentication. 
• Biometric authentication shall be compulsorily in cases where there are sufficient mismatches in PAN and Aadhaar data.

Through SMS

An applicant may also link his/her PAN with Aadhaar by sending an SMS to 567678 or 56161 in the following format:

UIDPAN<Space><12-digit Aadhaar number ><Space><10-digit PAN>

Consequences of non-linking PAN with Aadhaar

As per the rule 114 AAA of the Income-tax Rules,1962 after the PAN of a person becomes inoperative, the holders of such PANs will not be able to furnish, intimate or quote their PANs and shall be liable to all the consequences under the Act for such failure.

So, once a PAN becomes inoperative, the PAN holder will face the following consequences:

• ITRs can’t be filed using the inoperative PAN; 
• Already filed returns of such inoperative PAN holders will not be processed; 
• Holders of inoperative PANs won’t get the pending tax refunds;
• In the case of defective returns, pending proceedings cannot be completed after the PAN becomes inoperative; and
• Like the cases, where PAN details are not available, holders of inoperative PANs will end up paying tax at a higher rate.

However, the person can reactivate his PAN by intimating his Aadhar to the Department. 

Conclusion

To avoid the adverse consequences of holding an inoperative PAN, genuine taxpayers having only one PAN must link it with his/her Aadhaar number before the end of June 30, 2023 deadline.

Frequently Asked Questions (FAQs)