Why Linking of PAN Card and Aadhar Card is Important?
Linking the PAN card and Aadhaar card is important due to several reasons. The Government of India has made it mandatory to link the two identification cards for taxpayers.
- Income Tax Filing:
Linking PAN and Aadhaar is mandatory for filing income tax returns in India. You cannot e-file your tax returns without this linkage. This helps the government track your financial transactions and income accurately, reducing the chances of tax evasion. - Fraud combating:
Linking Aadhaar and PAN can prevent tax evasion and fraud as it creates a traceable audit trail. Every financial transaction will be linked to the PAN card, enabling the authorities to track the flow of money accurately.
- Banking transactions:
Banks have made the linking of PAN and Aadhaar compulsory for customers to operate their accounts. Moreover, the Account Holder’s identity is verified in all banking transactions, serving as an anti-fraud measure. - Availing Government Subsidies and Services:
Many government subsidies and services are linked to Aadhaar. Having your PAN linked to Aadhaar can make it easier to access these benefits, including Direct Benefit Transfer (DBT) schemes.
What Is The Penalty For Not Linking Aadhar Now?
Irrespective of your reasons, The Central Board of Direct Taxes will impose a fine of Rs.1000/- if you link your Aadhar Card with PAN Card after 30th June 2022.
If you linked PAN-Aadhaar after 31 March 2022, but before 30 June 2022, a penalty of Rs.500 was imposed. However, after 30 June 2022, a penalty of Rs.1,000 is imposed to link PAN with an Aadhaar card. Thus, you must first pay the penalty of Rs.1,000 to link your Aadhaar with your PAN before 30 June 2023.
Can I link Aadhaar with PAN for free?
The Central Board of Direct Taxes (CBDT) has extended the last date for linking PAN with Aadhaar to 30 June 2023. If you link your PAN and Aadhaar cards on or before 30 June 2023, you will have to pay Rs.500. A fee of Rs.1,000 will be applicable if you complete PAN-Aadhaar linking on or after 1 July 2023.
So linking your PAN (Permanent Account Number) card and Aadhaar card is essential for several reasons, primarily related to taxation, financial compliance, and identity verification.