New Delhi, 1 July 2022: PAN card holders will now have to pay a penalty of Rs 1,000 for not linking their PAN with Aadhaar card. Earlier, the penalty for non-linking of PAN and Aadhaar card was Rs 500.
PAN card holders will now have to pay a penalty of Rs 1,000 for not linking their PAN with Aadhaar card. Earlier, this penalty was Rs 500. According to the recently added section 234H of the Income Tax Act (added in March 2021 through the Finance Bill), non-linking of PAN and Aadhaar card will attract a penalty of up to Rs 1,000. However, such PAN cards will remain functional till March 2023 for filing ITR, claiming refunds and other income tax related work. Anyone who has not linked PAN and Aadhaar can link PAN-Aadhaar after paying the late fee.
Why is the linking of PAN-Aadhaar cards necessary?
If a person has not linked his PAN card with Aadhar card, then his PAN card will become inoperative. PAN cardholders who do not link PAN-Aadhaar will not be able to invest in mutual funds, stocks. Also, they will not be able to open bank accounts and they will face problems in all those work where a PAN card is necessary.
In addition, if a person produces an invalid PAN card, then under section 272B of the Income Tax Act 1961, the Assessing Officer can impose a penalty of Rs 10,000 on such person.