The government mandates linking Permanent Account Number (PAN) with Aadhaar to streamline taxation and curb multiple PAN possession. The Income-tax Act necessitates Aadhaar quoting in PAN applications and tax returns, alongside linking Aadhaar with PAN.
If you’re an NRI, there are some exceptions. If you’re living in certain places, are above 80 years old, or are not an Indian citizen, you might not need to link them.
But if you don’t link them by the deadline, your PAN card will stop working, and you won’t get any tax refunds. You might also have to pay more tax if they’re not linked.
The government has given extra time to link them, but many people, including NRIs, still haven’t done it. They’ve even collected a huge amount of money in fines from those who didn’t link on time.
To make your PAN card work again, you’ll need to pay a late fee. It’s important for NRIs to do this to avoid problems with their taxes and finances.
Non-compliance results in increased TDS and TCS rates. The government extended deadlines multiple times, but as of January 29, 2024, about 11.48 crore PANs remain unlinked with Aadhaar.
The Ministry of State for Finance reported a penalty collection exceeding ₹600 crore from defaulters.
To reactivate an inoperative PAN, a late fee of ₹1,000 is required. Compliance is crucial for smooth financial transactions and to avoid penalties and disruptions.
