What are Consequences for not linking PAN with Aadhaar Number

Ans. The Central Board of Direct Taxes has notified Rule 114AAA prescribing the manner and consequences if PAN becomes inoperative. The Rule 114AAA(3) provides that if PAN of a person become inoperative, then he shall be liable for the following consequences:

1. Refund of any amount of tax or part thereof, due under the provisions of the Act shall not be made;

2. Interest shall not be payable on such refund for the period, beginning with the date when PAN become inoperative and ending with the date on which it becomes operative;

3. Where tax is deductible under Chapter XVIIB in case of such person, such tax shall be deducted at higher rate, in accordance with provisions of section 206AA;

Where tax is collectible at source under Chapter XVII-BB in case of such person, such tax shall be collected at higher rate, in accordance with provisions of section 206CC.

However, the person can reactivate his PAN by subsequently intimating his Aadhaar to the Department.

Further, if a person fails to link PAN-Aadhaar by due date, he shall be liable to pay a fee, maximum of Rs. 1,000 under section 234H. 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​