Why do you need to link your PAN with your Aadhaar before 31st March?

Why do you need to link your PAN with your Aadhaar before 31st March?


The majority of people are conscious that they must pay the government the proper tax on whatever income they make over a certain threshold each year. However, the majority of people become confused about how to submit their income tax returns throughout tax season. These returns, sometimes referred to as ITRs, are as essential to maintaining your tax obligations as paying them. If you don't tell the authorities, you may eventually be subject to fines and trouble since it could turn into tax evasion. As a result, everyone in the taxable category is required to submit income tax forms regularly. The Income Tax Department has repeatedly reminded people that they must submit their ITRs before the deadline. Likewise, one must link their pan with adhaar to avoid any sort of penalty.

What is the reason for linking PAN with Aadhaar?

The PAN card will no longer be valid if both identification cards, Aadhaar and Permanent Account Numbers, are not linked before March 31, 2023. By March of this year, PAN holders must link their accounts with Aadhaar to avoid having their PANs become "inoperative," according to the Income Tax Department.

If Aadhaar and PAN cards are not linked by 31 March 2023, people will be unable to access PAN-related services or file income tax returns.

When the PAN stops working, the person will no longer be able to complete several financial transactions, including opening a bank account, investing in stocks, mutual funds, etc., or going anywhere that requires the PAN to be quoted, such as when getting a lower tax deduction on your salary or interest income.

According to tax professionals, if the PAN expires and needs to be quoted or provided someplace, it will be considered that the PAN has not been furnished or quoted, and the individual may be penalized under the Income-tax Act, 1961. A fine of Rs 10,000 may be assessed under section 272B if the PAN cannot be quoted or provided.

When the deadline has passed, a person can still link their PAN and Aadhaar by paying a fine. Under section 234H of the Income-tax Act, a penalty shall be assessed. The highest fee for integrating PAN into Aadhaar just after the due deadline has passed would not exceed Rs 1,000, even though the government has not yet announced the penalty amount.

Who needs to link PAN with Aadhaar?

All PAN holders who don't fall under the exempted categories must link their permanent account numbers (PANs) with their Aadhaar before March 31, 2023, according to the I-T Act. The unlinked PAN shall cease operation on April 1, 2023."

The Income-tax Act mandates that every individual who has been assigned a PAN as of July 1, 2017, inform the IRS of his or her Aadhaar number so that Aadhaar and PAN can be linked, by a CBDT circular released in March 2022. If this is not completed by March 31, 2023, the PAN will cease to function.

Who is not required to link PAN with Aadhaar?

A person who is not required to link their Aadhaar and PAN is:

  • residence of states of Assam, Jammu, and Kashmir, or Meghalaya

  • not being an Indian citizen

  • being a non-resident as defined by the Income Tax Act of 1961; or 

  • being at least 80 years old at any point in the previous year.

What will happen if PAN is not linked with Aadhaar?

According to CBDT, a person's PAN will stop working if they don't link it to their Aadhaar. The individual will be subject to all of the Income-tax Act's penalties for failing to provide, divulge, or quote their PAN in this situation. Non-compliance has several serious consequences, including:

  • The individual is not permitted to file an income tax return using an invalid PAN.

  • Processing of pending returns is suspended.

  • Inactive PANs cannot receive pending reimbursements.

  • After the PAN is inactive, ongoing proceedings, such as those involving defective returns, cannot be finished.

  • If PAN is rendered inoperative, the tax will need to be withheld at a higher rate.

  • In addition to these negative effects, the person can encounter challenges while conducting other financial transactions, such as those with banks, because PAN is a crucial KYC requirement for these transactions.

Why has SEBI made it mandatory for investors to link their PAN with their Aadhaar?

The Securities & Exchange Board of India (SEBI) has requested that all registered organizations, market infrastructure institutions, and investors make sure that all participants have valid KYC before the obligatory linking of Permanent Account Number (PAN) with the Aadhaar deadline of March 31 approaches.
All SEBI-registered organizations and Market Infrastructure Institutions (MIIs) are needed to provide valid KYC for all participants because PAN is the essential identifying number and a necessity for KYC for all transactions in the securities market, according to a statement from SEBI.

"All current investors are obligated to make sure linking of their PAN with Aadhaar number previous to March 31 for continuous and seamless securities trading activity and to minimize implications of non with the Central Board of Direct Taxes (CBDT) circular," SEBI added. "Such accounting entries would just be deemed non-compliant, and there might be limitations on securities and other transactions until the PAN and Aadhaar are linked.

How to link PAN with Aadhaar?

How to use SMS to link Aadhaar and PAN cards:

  • Write a message in the UIDPAN format, which is as follows: UIDPAN (space), 12-digit Aadhaar number (space), 10-digit PAN number.

  • The SMS must only be sent to the numbers 567678 or 56161 from your registered phone number.

  • You will receive an SMS confirming the linkage of your PAN card and Aadhaar.

How to online link your PAN card and Aadhaar card:

  • Visit the Income Tax Department of India's official websites, eportal.incometax.gov.in or incometaxindiaefiling.gov.in.

  • Get registered if you haven't already.

  • Your PAN card number or Aadhaar number would be assigned as your user ID.

  • To log into the portal, enter your user ID, password, and birthdate.

  • A pop-up message mentioning the linkage of PAN with Aadhaar will appear on your screen.

  • Check the "Quick Links" section on the left side of the site if the notification isn't there.

  • On the home page, click the "Link Aadhaar" option.

  • Enter your PAN, Aadhaar, and name as they appear on your Aadhar card.

  • If true, select the "I have just year of birth in my Aadhaar card" checkbox.

  • To validate, enter the Captcha code that appears on your screen.

  • You will receive a confirmation notification that your PAN and Aadhaar records have been successfully linked once all the information you entered matches.

  • Your PAN card and Aadhaar card will be successfully linked.

Note: You must update your Aadhaar information to match your PAN records if the information on your PAN card and Aadhaar card does not match.

Aadhaar link status check

If you wish to verify your status after completing the connection process, go to the same portal at www.incometax.gov.in. Do the following actions now:

  • Choose the "Aadhar Link Status" menu item, which is next to "Connect Aadhar."

  • Insert both your Aadhar and PAN card numbers.

  • Choose "View Link Status." You can now quickly check the status of the PAN-Aadhaar number link.


Things are now easier than ever thanks to e-filing income tax returns and connecting Aadhaar to ITR. Simply log into the portal and upload all the necessary paperwork. To save time, you can maintain the scanned copy of generic records in your system. We are no longer burdened with the difficult process of manual filing and paperwork thanks to these services.

Also, you can now follow the progress of your application online, which would be extremely useful when the department flags errors and requests a new application. To avoid missing the deadline for electronically reporting your ITR, the Aadhaar connection makes sure you receive regular updates on your registered mobile number.


Archita Sharma
Archita Sharma, IV year BA.LLB (Hons.) student from PSIT College of Law

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