The Central Board of Direct Taxes (CBDT) has announced that taxpayers have until June 30, 2023 to link their Permanent Account Number (PAN) with their Aadhaar. This move is aimed at preventing tax evasion, and failure to link the two documents will result in an inoperative PAN card.
The CBDT has also outlined the penalties that taxpayers will face if their Aadhaar and PAN are not linked from July 1, 2023. These penalties include the disallowance of tax refunds against such PAN cards, the non-payment of interest on refunds for the period when the two documents were not linked, and the deduction/ collection of both tax deducted at source (TDS) and tax collected at source (TCS) at a higher rate. Taxpayers can avoid these penalties by making their PAN card operative again within 30 days after paying a late fee of ₹ 1,000.