Linking of PAN with Aadhaar Number

The Finance Act, of 2017 inserted a new section 139AA in the Income-tax Act, of 1961, requiring every person who is eligible to obtain an Aadhaar to quote his Aadhaar number while applying for a PAN Card or furnishing a return of income with effect from July 1, 2017.

If any person does not possess the Aadhaar Number but applied for the Aadhaar card then he can quote the Enrolment ID of the Aadhaar application Form in the ITR.

Section 139AA further provides that every person who has been allotted PAN as of the 1st day of July 2017, and who is eligible to obtain an Aadhaar number shall intimate his Aadhaar number on or before 31-03-2022 to the Income-tax Department. In case of failure to intimate the
The aadhaar number and PAN allotted to the person shall be made inoperative after the notified date.

The CBDT has notified that all the consequences provided under the Income-tax Act for not furnishing, intimating or quoting PAN shall come into effect from 01-04-2023 if PAN becomes inoperative due to non-linking of it with Aadhaar. However, the taxpayer is liable to pay the fee if
PAN is linked with Aadhaar from 01-04-2022 to 31-03-2023.

Consequences for not linking PAN with Aadhaar Number

The Central Board of Direct Taxes has notified Rule 114AAA defining the manner and consequences if PAN becomes inoperative. The Rule 114AAA(2) provides that where a person, whose PAN has become inoperative, it shall be deemed that he has not furnished, intimated or
quoted the PAN, as the case may be, and he shall be liable for all the consequences under the Act for not furnishing, intimating or quoting the PAN.
However, the person can reactivate his PAN Card by afterwards intimating his Aadhaar to the Department. Fee for default relating to the intimation of Aadhaar number
The Finance Act, 2021 has inserted a new Section 234H to levy a fee for default in intimating the Aadhaar Number. If a person is required to intimate his Aadhaar under Section 139AA and such person fails to do so, he shall be liable to pay a fee, as may be prescribed, not exceeding Rs. 1,000 at the time of making such intimation.
The CBDT vide notification No. 17/2022, dated 29-03-2022 has amended Rule 114 to prescribe the fees to be levied if Aadhaar is not linked with PAN. As per Rule 114(5A), if a person intimates his Aadhaar number after the due date, then he shall be liable to pay
a fee of:
a) Rs. 500, if such intimation is made between 01-04-2022 and 30-06-2022; and
b) Rs. 1,000, in all other cases.