Introduction
PAN Aadhaar linking has become a necessity in today’s times. It is a well-known fact that Aadhaar and PAN are two of the most important documents for Indian citizens. So, let’s understand the importance of the two documents and their linking.
Aadhaar is a 12-digit unique identification number. The Unique Identification Authority of India issues it to the citizens of India and is issued under Section 3 of The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits, and Services) Act, 2016.
While Permanent Account Number (PAN) Card is a 10-digit unique alphanumeric identification number. The Income Tax Department issues it under Section 139A of the Income Tax Act, 1961. One of the main reasons why linking the two has been mandated is because it helps keep track of transactions i.e., an audit trail entered into by the taxpayer.
Legal provisions relating to linking of Aadhaar with PAN
Section 139AA of the Income Tax Act, 1961 provides for mandatory linking of Aadhaar and Pan Cards. It states that “Every person who is eligible to obtain an Aadhaar number shall, on or after the 1st day of July 2017, quote Aadhaar number—
(i) in the application form for allotment of permanent account number;
(ii) in the return of income:
……………….”
Moreover, subsection (2) of Section 139 AA of the Income Tax Act, 1961 states “Every person who has been allotted a permanent account number as on the 1st day of July 2017, and who is eligible to obtain an Aadhaar number, shall intimate his Aadhaar number to such authority………………………”
Furthermore, it states that if an individual doesn’t link both documents, he will be liable to a penalty and his PAN Card will be considered invalid.
For whom it is not mandatory:
As per Notification No. 37/2017 dated 11th May 2017, it is not mandatory for an individual to link their Aadhaar to their PAN, if such a person is:
- Residing in the States of a. Assam, b. Jammu and Kashmir, and c. Meghalaya; or
- Non-resident as per the Income-tax Act, 1961 or;
- 80 years of age or more at any time during the previous year or;
- not a citizen of India.
Constitutional Validity of Aadhaar and Pan Card Linking:
The Supreme Court of India, 2018 upheld the constitutional validity of linking one’s Aadhaar with their PAN and held that it is mandatory for income tax returns filing.
Benefits of linking Aadhaar with PAN
Following are some of the benefits of linking both documents:
- Prevents tax evasion.
- Furthermore, it helps the Government to easily identify who has multiple Pan Cards and take necessary action.
- Moreover, it helps in faster processing of Income Tax Returns as personal details like name, address, and date of birth are automatically verified and taxpayers receive their refunds faster.
- It also eliminates the risk of identity theft and fraud.
Procedure for Aadhaar PAN linking:
Linking of the Aadhaar and PAN can be done via both online and offline modes.
Online linking process
The online process for linking your Aadhaar with your PAN is as follows:
- Visit Income Tax Department’s e-filing website “https://www.incometax.gov.in/iec/foportal/”
- Then, click on the ‘Link Aadhaar’ option
- Next, enter your Aadhaar number and your PAN
- Then, click on the “Validate” option.
- After verification, the Aadhaar and PAN will be linked.
Offline linking process
The offline procedure to link Aadhaar to PAN is as follows:
- Visit the nearest PAN service center or Aadhaar Enrollment Center.
- Fill out Form 49A for PAN and Form Aadhaar Enrollment Form for Aadhaar.
- Then, Submit the forms along with your PAN card and Aadhaar card.
- After the documents are verified, your Aadhaar and PAN will be linked.
Common Errors and Solutions:
Spelling mismatch in the Name of the Aadhaar and PAN Card was found as the most common error during the filing procedure.
In order to solve this error, the Government decided to change the spelling of any of the documents to make them compliant with the other one.
Recently, the Income Tax Department, with a view to addressing this issue made a tab called “Links to correct name” which allowed taxpayers to address this error very quickly and efficiently.
Furthermore, individuals can also check the status of their request on the Income Tax Department’s e-filing website.
In case of any other issues, taxpayers can contact the Income Tax Department’s customer care helpline or visit the nearest PAN service center or Aadhaar Enrollment Center.
Deadline for PAN Aadhaar linking:
The deadline for linking your Aadhaar and your PAN has been extended to 30th June 2023.
Conclusion:
To conclude, the process of linking one’s Aadhaar with their PAN is mandatory and has been upheld by the Supreme Court in its judgment. The linking helps the Government in checking tax evasion, faster processing Income Tax Returns and Refunds, and reduces the risk of identity theft and fraud. The procedure is quite simple and quick and can be done in both online and offline modes. So, it is advisable that all Indian Citizens should link both these documents to avoid any consequences.
Contact us at Sorting Tax to link your PAN and Aadhaar today.
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