Link your Aadhaar Card and PAN before March 31; Find details

To expedite financial transactions and prevent tax evasion, the Central Board of Direct Tax (CBDT) has issued a final warning for individuals to link their PAN to their Aadhaar. The Indian government has asked all taxpayers to comply with this requirement by March 31, 2023, with a penalty of Rs 1,000. If not linked by the expiration date, the PAN card will no longer be operational to initiate all financial transactions. Even the SEBI (Securities and Exchange Board of India) has issued a notice linking the two ID cards. As a result, one cannot create any transaction on financial markets like NSE and BSE.

Read on if you still need to link your Aadhaar with your PAN and have questions about the process. We tried to answer the most common questions related to PAN Aadhaar pairing to help you understand why and how to start the PAN and Aadhaar pairing process.

Why the government made it mandatory to link PAN with the Aadhaar card

India's Department of Income Tax forced Aadhaar with PAN to address the PAN duplication issue. The IT Department identified cases where an individual had multiple PANs or multiple individuals assigned one PAN number. This resulted in inaccuracies in the tax collection and made identifying and tracking taxpayers easier. So, to establish a robust method of deduplicating the PAN database, the Aadhaar-PAN link was made mandatory.

After linking Aadhaar with PAN, the Indian government can verify the identity of taxpayers, prevent tax evasion and ensure compliance with tax laws, as Aadhaar holds the UID number and biometric data of Indian citizens. Furthermore, linking Aadhaar to PAN also helps eliminate false and duplicate PANs, thus increasing the tax system's efficiency.

Who needs to link Aadhaar with a PAN card?

In March 2022, the CBDT (Central Board of Direct Taxes) issued a circular stating that it is mandatory for all persons assigned a PAN on or before July 1, 2017, to link their Aadhaar number with their PANs. The linking of the Aadhaar and the PAN card must be done before March 31, 2023. Otherwise, the PAN will stop working.

Steps to link Aadhaar card with PAN

- Go to the income tax e-filing portal: incometaxindiaefiling.gov.in.

- Click on the 'Aadhaar Link' option.

- Enter your PAN, Aadhaar number and name according to Aadhaar in the corresponding fields.

- Check the details and send.

- Upon successful pairing, you will receive a confirmation message, and an OTP will be sent to your registered mobile phone number.

You can also link your Aadhaar with your PAN by sending an SMS. To do it- Send UID PAN - SPACE - 12-digit Aadhaar - Space - 10-digit PAN to 567678 or 56161.

Who need not link Aadhaar and PAN?

While the mandate applies to all Indian citizens, some categories of people are exempt from the Aadhaar-PAN bond.

Who is exempted from Aadhaar and PAN linking?

There are some categories of people for whom this link is optional. Citizens aged 80 and over, non-residents under the Income Tax Act and non-citizens of India living in India are exempt from the Aadhaar-PAN bond.

Aadhaar- PAN link last date and penalty rate

The last date to link Aadhaar to the PAN for free was March 31, 2022. After that, the Indian government extended the deadline but with a fine. Citizens must now pay Rs 1,000 as a fine to link their Aadhaar with their PAN before March 31, 2023. If it is not done after the deadline, the PAN card will become inoperative; it won't be valid to carry out any financial process, such as completing the ITR declaration.