PAN will become inoperative after March 31 if not linked with Aadhaar: Income Tax dept

The Income Tax Department announced on February 15, 2020 that the Permanent Account Number (PAN) will become inoperative if it is not linked with Aadhaar on or before March 31, 2020.

The deadline to link PAN with Aadhaar has been extended many times previously. The current deadline to link PAN with Aadhaar will end on March 31, 2020.

According to the Income Tax department, there are over 17.58 crore PAN cards that are yet to be linked with the 12-digit Aadhaar card.

PAN to become inoperative

According to a CBDT notification, PANs that are not linked to Aadhaar by March 31, 2020, will become inoperative. The notification read that over 30.75 crore PANs have been linked to Aadhaar till January 27, 2020. However, around 17.58 crore PANs are still yet to be linked. 

Those whose PANs will become inoperative will also have to face the consequences under the IT Act for not intimating their permanent account number. On the other hand, for those linking their permanent account number with Aadhaar after March 31, their PAN will become operative from the date of intimation of Aadhaar number.

CBDT amends Income Tax Rules: When will PAN become inoperative?

The Central Board of Direct Taxes (CBDT) amended Income Tax Rules and inserted a new rule 114AAA, which includes the manner of making PAN inoperative. 

The CBDT stated that a person, who has been allotted PAN as on July 1, 2017 has to intimate his Aadhaar number under sub-section (2) of section 139AA. If the person fails to intimate the same on or before March 31, 2020, the PAN of such a person will become inoperative immediately.

What does section 139AA say?

Under Section 139 AA (2), the Income Tax Act states that every person having PAN as on July 1, 2017, and eligible to obtain Aadhaar, must intimate his Aadhaar number to the tax authorities.

Background

The Supreme Court had declared Aadhaar as constitutionally valid in September 2018 and held that the 12-digit biometric ID will be mandatory for the filing of income tax returns and allotment of PAN cards.

Aadhaar is a 12-digit biometric identification number, which is issued by the Unique Identification Authority of India (UIDAI) to a resident of India. PAN is a 10-digit alphanumeric number, which is allotted by the income tax department, to a person, firm or entity in India.

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