PAN becomes inoperative : The Income Tax Department has said that PAN and Aadhaar not linked till March 31 will remain functional for one more year till March 2023, for filing ITR, claiming refunds and other I-T procedures. However, the non-linking of PAN with Aadhaar would attract a penalty.
10 big consequences when your PAN becomes inoperative
1) As per a circular issued by CBDT, PAN not linked to Aadhaar, would become “inoperative” after March 31, 2023.
2) Those taxpayers who link their PAN with biometric Aadhaar by June 30, 2022, would be required to pay late fees of ₹500. Beyond that, the penalty would rise to Rs 1,000.
3) Accordingly, in case of failure to intimate the Aadhaar Number by the last extended notified date, the PAN allotted to the person shall be made inoperative in accordance with the provisions of the Act.
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4) Further, rule 114AAA of the Income-tax Rules provides that if the PAN of a person has become inoperative, he will not be able to furnish, intimate or quote his PAN and shall be liable to all the consequences under the Act for such failure.
5) The person shall not be able to file a return using the inoperative PAN.
6) Pending returns will not be processed.
7) Pending refunds cannot be issued to inoperative PANs.
8) Pending proceedings as in the case of defective returns cannot be completed once the PAN is inoperative
9) Tax will be required to be deducted at a higher rate as PAN becomes inoperative.
10) In addition to the above, the taxpayer might face difficulty at various other fora like banks and other financial portals, as PAN is one of the important KYC criteria for all kinds of financial transactions.
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