How To Link PAN With Aadhaar Online And Avoid Higher TDS Deductions

The Income Tax Department has issued a crucial reminder for taxpayers to link their Permanent Account Number (PAN) with Aadhaar by May 31, 2024. Missing this deadline will result in higher rates of Tax Deducted at Source (TDS) for taxpayers.

Importance of PAN-Aadhaar Linking

PAN is a ten-digit alphanumeric identifier provided by the Income Tax Department to taxpayers in India. Aadhaar, on the other hand, is a unique twelve-digit identification number issued by the Unique Identification Authority of India (UIDAI). Linking PAN with Aadhaar aims to simplify tax filing, eliminate duplicate PAN cards, and enhance financial transparency.

Step-by-Step Process to Link PAN with Aadhaar

Online Linking via Income Tax Department Portal

1. Visit the Official Website : Go to the income tax e-filing website: [Income Tax e-Filing](https://www.incometaxindiaefiling.gov.in/).
2. Select ‘Link Aadhaar‘: Under the “Quick Links” tab, choose “Link Aadhaar”.
3. Access the Aadhaar Linking Page : You can directly go to the Aadhaar linking page via this URL: [Link Aadhaar](https://www.incometaxindiaefiling.gov.in/eFiling/Services/LinkAadhaarHome.html).
4. Fill in the Form : Enter your PAN, Aadhaar number, and name exactly as on your Aadhaar card.
5. Additional Details : If your Aadhaar card only shows the year of birth, check the corresponding box. Enter the “Captcha Code” for verification.
6. Submit the Form : Click on “Link Aadhaar”. If the details match the Aadhaar database, your PAN will be linked with Aadhaar.

Consequences of Not Linking PAN with Aadhaar

Failing to link PAN with Aadhaar by the deadline can have significant impacts:
Higher TDS : Non-compliance will result in a higher rate of tax deduction at source.
ITR Filings : It will complicate income tax return (ITR) filings. The last date to file ITR is July 31, 2024.
Inoperative PAN : PAN will become inoperative, affecting all financial transactions requiring PAN.

Reminder from the Income Tax Department

The Income Tax Department reiterated the importance of linking PAN with Aadhaar by May 31, 2024, to avoid higher tax deductions under Sections 206AA and 206CC of the Income Tax Act, 1961. A reminder was posted on X (formerly Twitter), urging taxpayers to link their PAN with Aadhaar to prevent their PAN from becoming inoperative for transactions entered before March 31, 2024.

Circular from the Central Board of Direct Taxes (CBDT)

In a circular issued on April 23, 2024 (CBDT Circular No. 6/2024), the CBDT emphasized the importance of linking PAN with Aadhaar. The circular addressed issues faced by deductors/collectors who had deducted TDS/TCS at regular rates but were required to do so at higher rates due to the PAN being inoperative since April 1, 2023. The CBDT noted that demands had been raised against such deductors/collectors for “short-deduction/collection” of TDS/TCS.

Who Needs to Link Aadhaar and PAN?

According to Section 139AA of the Income Tax Act, every individual who has been allotted a PAN as of July 1, 2017, and is eligible for an Aadhaar number, must link the two. Failure to do so by the specified deadline will result in the PAN becoming inoperative. However, individuals in exempted categories will not be affected.

Steps to Link Aadhaar and PAN

1. Visit the Income Tax e-Filing Portal : Click on ‘Link Aadhaar Status’ under quick links on the homepage.
2. Enter Details : Provide PAN and Aadhaar details, then click ‘View Link Aadhaar Status’.
3. If Not Linked : A prompt will appear to link them.
4. Provide Required Information : Enter PAN number, Aadhaar number, name on Aadhaar, and mobile number.
5. Additional Checks : Select the box if only the birth year is mentioned on the Aadhaar card, and agree to validate Aadhaar details.
6. Complete the Linking : Enter the Captcha code, and an OTP will be sent to the registered mobile number for validation.
7. Payment of Fine : A fine of Rs 1,000 must be paid to link Aadhaar and PAN.

By following these steps and meeting the deadline, taxpayers can ensure their PAN remains operative and avoid higher TDS rates.