PAN-Aadhaar: Failure to link will hit you hard financially

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The Central Board of Direct Taxes (CBDT) has fixed June 30 as the last date for linking PAN with Aadhaar. If the two are not linked by that date, the PAN will be rendered inoperative.

Besides, one will be slapped a fine up to Rs 1,000 as a penalty. This dateline was supposed to expire on March 31 and was extended for three months to June 30 due to pandemic outbreak.

Failure to link PAN and Aadhaar card will attract more tax on the interest earnings on bank deposits of the person concerned.

Tax implications

In case of the PAN card turning inoperative, one’s bank account will become an account without a PAN card linkage. In that case, if the bank account holder gets interest on savings above Rs 10,000 then the TDS (tax deducted at source) will be at the rate of 20%. For bank accounts linked with a PAN, the TDS would be at the rate of 10%.

Also Read: Nine-step guide to link PAN with Aadhaar

Second, if a bank account holder deposits Rs 50,000 or above at a time, then the income tax department can charge up to Rs 10,000 as penalty according to the deposit amount.

Third, an individual may not be able to open a bank account, sell or buy a property, and make any investments or file IT return without a PAN card.

How can you link?

You have just about a week to link PAN and Aadhaar. One can link PAN and Aadhaar by online, offline and manually.

It will take a maximum of five minutes to link PAN with Aadhaar. So if you have still not done it, please do it over the next few days.