The Pension Fund Regulatory and Development Authority (PFRDA) has announced an extension of the deadline for linking Aadhaar with Permanent Account Number (PAN) to 30 June 2023. The Central Board of Direct Taxes (CBDT) has also extended the deadline for linking PAN with Aadhaar until this date.
Why does the government want to link PAN with Aadhaar?
- The government wants to link PAN with Aadhaar to prevent tax evasion, identify duplicate PANs, and streamline the process of tax filing.
- By linking PAN with Aadhaar, the government can verify the identity of taxpayers and reduce the chances of fraudulent activities.
- It also makes it easier for taxpayers to file their taxes online and receive refunds directly to their bank accounts.
- Additionally, linking PAN with Aadhaar enables the government to maintain a comprehensive database of taxpayers and reduce the administrative burden of managing multiple identification numbers.
Who Needs to Link PAN with Aadhaar?
As per the Indian government’s mandate, all individuals who possess a Permanent Account Number (PAN) and Aadhaar are required to link them. This includes individuals who file income tax returns or carry out any financial transactions that require PAN verification, such as opening a bank account or making high-value transactions.
What are the repercussions of non-compliance?
- If an individual fails to link their PAN with Aadhaar by the deadline, their PAN will become inoperative or invalid.
- This means that they will not be able to carry out certain financial transactions that require PAN, such as opening a bank account, buying or selling property, or making investments.
- Additionally, they may be liable to pay a penalty of ₹ 1,000 for not linking their PAN with Aadhaar within the specified timeline.
- If an individual fails to link their PAN with Aadhaar before the deadline, the Pension Fund Regulatory and Development Authority (PFRDA) has cautioned that their National Pension System (NPS) account transactions will be restricted.
- PAN is an essential identification number for NPS accounts and is a crucial component of the Know Your Customer (KYC) requirements. Therefore, all intermediaries must ensure valid KYC for all subscribers.
- Therefore, it is important to link PAN with Aadhaar before the deadline to avoid any inconvenience or penalty.
About The Pension Fund Regulatory and Development Authority (PFRDA)
- The Pension Fund Regulatory and Development Authority (PFRDA) is a statutory body established in 2003 by the Indian government to regulate, promote, and develop the pension sector in India.
- Current Chairperson – Deepak Mohanty
- The PFRDA is responsible for overseeing and regulating the National Pension System (NPS), which is a defined contribution-based pension system in India.
- The NPS was introduced by the Indian government in 2004 as a voluntary pension scheme for government employees.
- It was later opened up to all Indian citizens between the ages of 18 and 65, including the unorganized sector, in 2009.
- The scheme is designed to provide retirement income to individuals and aims to encourage citizens to save for their retirement.
- The PFRDA is responsible for formulating policies and regulating the operations of NPS intermediaries such as Pension Fund Managers (PFMs), Custodians, Central Recordkeeping Agencies (CRAs), and Points of Presence (POPs).
- It also oversees the activities of the Trustee Bank, which is responsible for the safekeeping of pension funds.
- Apart from regulating the NPS, the PFRDA also promotes and develops the pension sector in India through various measures such as public awareness campaigns, financial literacy programs, and the development of new pension products.
- The PFRDA also monitors the performance of pension funds and takes corrective actions when necessary to protect the interests of subscribers.
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Is PAN Aadhaar linking deadline extended till June 30, 2023?
Yes, the deadline for linking the Permanent Account Number (PAN) with Aadhaar has been extended to June 30, 2023, by the Central Board of Direct Taxes (CBDT) and the Pension Fund Regulatory and Development Authority (PFRDA).
What is the late fine for a PAN Aadhaar link?
If you miss the deadline, your PAN card may become invalid and you may face other consequences such as restrictions on certain financial transactions, so it is advisable to link your PAN with Aadhaar before the deadline. There is also a provision for a fine of ₹ 1,000 for missing the deadline.