MANDATORY LINKING OF PAN-AADHAAR

As per section 139AA of the Income Tax Act 1961, every person who has been allotted Permanent Account Number (PAN) and is eligible to obtain an Aadhaar Number shall mandatorily link PAN with Aadhaar. If PAN is not linked with Aadhaar by 31-03-2022 (deferred till 30-June-2023), the status of PAN provided by customer will become “inoperative”

As per Income Tax Rules 1962, once PAN become inoperative, it shall be deemed that the person has not furnished, intimated, or quoted the PAN to bank and he shall be liable for all the consequences under the Income Tax Act for not furnishing, intimating, or quoting the PAN. Based on the Income Tax notification dated 28-03-2023, the above negative consequences of “Inoperative PAN” are deferred till 30th June 2023. 

 From 1st July 2023, Inoperative PAN will attract higher TDS/TCS rate and will also restrict the following specific transactions where quoting of PAN is mandated (applicable to Banks).

1. Cash Deposits above Rs.50,000/- (Single/ Aggregate per day) 
2. Opening of an account, including loan account (other than BSBD accounts) 
3. Time deposit above Rs.50000/- (Aggregate 5 Lakh per annum) 
4. Issuance of Debit/Credit Card (Resident only)
5. Invest/Redeem Mutual Funds 
6. Purchase of any foreign currency above Rs.50,000/- 
7. Sale or purchase of any immovable property 
8. Opening of Demat account 
9. Sale of motor vehicle other than two-wheeler 
10. Purchase or sale of goods or services of any nature other than those specified above for an amount exceeding Rs. 2 Lakh (Gold Auction sale, Scrap sale etc.)

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