Aadhaar PAN linked? Not yet? PAN will be INOPERATIVE! Last date, fine and other details from CBDT

Have you linked your Aadhaar Card and Permanent Account Number (PAN)? If not then you can do so by June 30, 2021. However, if you miss the chance of linking your Aadhaar with PAN then you will have to face certain consequences.

The Central Board of Direct Taxes (CBDT) has stated that those who will not link their PAN with Aadhaar, their PAN will become inoperative.

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The deadline for linking Aadhaar with PAN has been extended by the central government several times. Also, the central government had in Budget, 2021 introduced a new section of 234H in Income Tax Act, 1961. Under this section it was said that if a PAN is linked with Aadhaar after the deadline date, then a fine can be levied. However, people can know that the fine charged will not be more than Rs 1000.

What is PAN?

PAN is a ten-digit unique alphanumeric number issued by the Income Tax Department. PAN is issued in the form of a laminated plastic card.

When is a PAN required?

Here are some of the situations in which a person is required to provide his/her PAN card and it is mandatory. If the PAN becomes inoperative a person may face issue in doing these transactions:

1) Sale or purchase of a motor vehicle or vehicle other than two-wheeled vehicles.

2) Opening an account [other than a time-deposit referred at point No. 12 and a Basic Savings Bank Deposit Account] with a banking company or a co-operative bank.

3) Making an application for issue of a credit or debit card.

4) Opening of a demat account with a depository, participant, custodian of securities or any other person with SEBI.

5) Payment in cash of an amount exceeding Rs 50,000 to a hotel or restaurant against bill at any one time.

6) Payment in cash of an amount exceeding Rs 50,000 in connection with travel to any foreign country or payment for purchase of any foreign currency at any one time.

7) Payment of an amount exceeding Rs 50,000 to a Mutual Fund for purchase of its units.

8) Payment of an amount exceeding Rs 50,000 to a company or an institution for acquiring debentures or bonds issued by it.

9) Payment of an amount exceeding Rs 50,000 to the Reserve Bank of India for acquiring bonds issued by it.

10) Payment in cash for an amount exceeding Rs 50,000 during any one day for purchase of bank drafts or pay orders or banker's cheques from a banking company or a co-operative bank.

11) A time deposit of amount exceeding Rs 50,000 or aggregating to more than Rs 5 lakh during a financial year with - a banking company or a co-operative bank, a Post Office, a Nidhi referred to in section 406 of the Companies Act, 2013, a non-banking financial company.

12) Payment in cash or by way of a bank draft or pay order or banker's cheque of an amount aggregating to more than Rs 50,000 in a financial year for one or more pre-paid payment instruments, as defined in the policy guidelines for issuance and operation of pre-paid payment instruments issued by Reserve Bank of India under section 18 of the Payment and Settlement Systems Act, 2007 to a banking company or a co-operative bank or to any other company or institution.