In 2 days, your PAN could become inoperative without Aadhaar link

Shishir Sinha New Delhi | Updated on December 30, 2019 Published on December 30, 2019

A representational Image of the PAN and Aadhaar card.   -  GRN Somashekar

Yet to link your PAN with Aadhaar? You have just 48 hours to do it. The Finance Act, 2019 makes it clear that unless the two are linked, your PAN becomes inoperative. This means you may not be able to carry out financial transactions or file I-T returns, where quoting PAN is mandatory.

The last day for linking PAN with Aadhaar is December 31, 2019.

As on November 11, the number of PANs linked with Aadhaar was 29,30,74,520. As on March 31, over 44.57 crore taxpayers had been allotted PAN; of this, nearly 98 per cent, or 43.52 lakh, were individual tax payers. Till date, more than 125 crore Aadhaars have been generated.

The move is aimed at ensuring the unique identity of PAN card-holders and to weed out undetected duplicate PANs. It is also seen as essential to prevent the misuse of PAN and potential tax frauds. Those aged 80 years or more, who do not possess an Aadhaar number or an enrolment ID, are exempt from this requirement.

Meanwhile, there is some confusion over the word ‘inoperative’.


What’s ‘inoperative’?

It is not clear whether Aadhaar can be quoted if PAN becomes inoperative, since the law says that the Aadhaar number can be used in lieu of PAN if the individual does not have PAN or if the PAN is linked to Aadhaar.

However, it is unlikely that the government will allow an individual to quote the Aadhaar number for transactions once the PAN becomes inoperative.

The reasons are obvious: Aadhaar can be used in lieu of PAN only if the person has not obtained PAN or if the PAN and Aadhaar are linked. However, experts still feel the I-T Department should come out with a detailed clarification on this.

Since the Finance Act, 2019, prescribes the interchangeability of PAN and Aadhaar, if you do not have PAN, you can quote the unique identity number for all the 18 financial transactions where quoting PAN is mandatory. Here, too, an SMS alert will be generated.

Meanwhile, if you do not have PAN and quote your Aadhaar number, the I-T Department will automatically allocate a PAN to you from the back-end. But you could end up with multiple PAN numbers if you already have one and it has become inoperative.

An inoperative PAN can be a hindrance to various financial transactions. Rule 114B of the Income-Tax Rules prescribes 18 types of financial transactions where quoting PAN is mandatory. These include all transactions related to the sale or purchase of a vehicle (excluding two-wheelers), opening a bank account (Jan Dhan or a basic account is exempt), applying for a credit or debit card, and opening a demat account.

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Published on December 30, 2019
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