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New Income Tax notification: Link PAN with Aadhaar even after March 31, but there’s a catch!

Rajeev Kumar
income tax rules, pan aadhaar link, pan aadhaar linking deadline, pan aadhaar linking last date, income tax pan aadhaar

New Income Tax Rules 2020: People failing to link their PAN with Aadhaar for Income Tax benefits will be able to so even after March 31. But there is a condition – Their PAN will remain inoperative for Income Tax purposes till the date they do so after the end of next month! The Central Board of Direct Taxes (CBDT) has issued a new notification, inserting changes in the Income Tax Rules 1962. The latest amendment to the Income Tax Rules brings in sub-section 114AAA to be inserted after rule 114AA of the Income Tax Rules 1962. The new changes provide for the consequences taxpayers may face if they fail to link their PAN with Aadhaar before March 31, 2020.

As per the new CBDT notification, PAN of persons, who were allotted permanent account numbers before 1st July 2020 and have failed to intimate their Aadhaar by 31st March 2020, will become inoperative after March 31 for furnishing, intimating, or quoting under the Income Tax Act. However, the PAN of such persons will become operative after March 31 for use under the Income Tax Act from the date they intimate Aadhaar.

The newly added sub-section 114AAA on "Manner of making permanent account number inoperative" says, "(1)Where a person, who has been allotted the permanent account number as on the 1st day of July, 2017 and is required to intimate his Aadhaar number under sub-section (2) of section 139AA, has failed to intimate the same on or before the 31st day of March, 2020, the permanent account number of such person shall become inoperative immediately after the said date for the purposes of furnishing, intimating or quoting under the Act."

If an individual’s PAN becomes inoperative because of not intimating Aadhaar by March 31, it will be considered that s/he had not furnished PAN where s/he is required to furnish/quote or intimate PAN, according to the notification dated February 13.

"(2)Where a person, whose permanent account number has become inoperative under sub-rule (1), is required to furnish, intimate or quote his permanent account number under the Act, it shall be deemed that he has not furnished, intimated or quoted the permanent account number, as the case may be, in accordance with the provisions of the Act, and he shall be liable for all the consequences under the Act for not furnishing, intimating or quoting the permanent account number," the notification said.

What if you link PAN-Adhaar after March 31

The notification also said that if a PAN cardholder has intimated his Aadhaar under section 139AA of the Income Tax Act after March 31, his PAN will become operative from the date of intimation of Aadhaar number for furnishing, intimating, or quoting under the Income Tax Act.

"(3) Where the person referred to in sub-rule (1) has intimated his Aadhaar number under sub-section (2) of section 139AA after the 31st day of March, 2020, his permanent account number shall become operative from the date of intimation of Aadhaar number for the purposes of furnishing, intimating or quoting under the Act and provisions of sub-rule (2) shall not be applicable from such date of intimation," the notification read.