05/06/2024
PAN card is of No use from June 2024, Know Why?
The Income Tax Department, in a recent notification, has mandated that taxpayers link their Permanent Account Number (PAN) with their Aadhaar by May 31, 2024, after this date your PAN will become Inoperative and will be of no use as you cannot use if for any financial transaction, KYC, leads to higher tax deductions, cannot File ITR and Refund is not allowed
Why Link PAN with Aadhaar?
According to the regulations, if a taxpayer’s PAN is not linked with his or her Aadhaar, Tax Deducted at Source (TDS) must be deducted at higher rate of 20% . This higher rate can significantly impact your finances, making the linking process essential.
Consequences of Non-Linking
If PAN is not linked with Aadhaar by the deadline, the PAN card becomes inoperative. This has several implications:
1 No Refunds: No refunds will be processed against such PANs.
2 Higher TDS and TCS: TDS (Tax Deduction at Source) and TCS (Tax Collection at Source) will be deducted/collected at a higher rate.
3 Income Tax Return filing not Allowed
Refund of Income tax not allowed
Financial Transaction Difficulties: The PAN card will stop working, leading to difficulties in financial transactions, including bank transactions, investments, and other financial activities.
Additional Impact on Property Transactions
If you are buying property (land, building, house, etc.) valued at more than ₹50 lakh, it is mandatory to deduct TDS at 1%. However, if the seller’s PAN is inoperative, you must be extra careful and deduct TDS at 20%. Before depositing TDS, always check the PAN-Aadhaar link status of the seller to avoid receiving a TDS demand notice for non-compliance with this provision.
Abdur Rahim Abdur Rahim - Accountant
