In a circular released by CBDT (Central Board of Direct Taxes) on March 30,
2022, it is stated that everyone with a valid PAN and Adhaar must link their PAN
with their Adhaar. Any noncompliance would be detrimental to the person and
render the PAN useless.
Person Eligible to link Adhaar and PAN
According to Section 139AA of the Income Tax Act of 1961, every person who had a
permanent account number as of July 1, 2017, and who was qualified for an Adhaar
number, was required to notify his Adhaar number in the manner prescribed by
law. By March 31st, 2023, these people must compulsorily link their Adhaar and
Who is exempt from the PAN-Adhaar Link
Anyone who is one of the following is exempt from the link requirement:
- Any person who has reached the age 80 or above it.
- A person who is non-resident stated in Income Tax Act 1961.
- A individual who does not hold Indian citizenship
- Any individual resides in the states of Jammu Kashmir , Assam and
But if anyone fall under this category, other than who is not an Indian
citizen, wants to voluntarily link their Adhaar and PAN, they can do so by
paying the amounts as per mentioned by the Income Tax Department.
What would happen if someone didn't link their Adhaar-PAN?
All tax payers have been requested by the CBDT to connect their PAN with their
Adhaar by March 31, 2023, and if they fails to do so , their PAN would become
inoperative as stipulated in the subsection(2) of Section 139AA, and they will
be required to pay a price specified by the Act.
When a person's Permanent Account Number becomes invalid:
- They are not permitted to file an income tax return.
- A PAN that is not active cannot receive pending refunds.
- The defective returns cannot be placed in pending processes.
- A higher rate of tax will be deducted.
As stated in the subsection(3) of section 114AAA of the Income Tax Act 1961.
SEBI guidelines for PAN-Adhaar Link
For frictionless transactions in the securities market, SEBI, the capital market
regulator, instructed all investors to link Adhaar-PAN.
The PAN is the primary identification number and a component of the KYC criteria
for all transactions, All SEBI registered organizations, market infrastructure
institutions, and investors to ensure valid KYC for all participants, according
to SEBI. Additionally, it is imperative that investors who have Demat accounts
make sure their PANs are linked to their Adhaar cards.
Methods of Linking
Adhar and PAN can be linked through online portal or even through message
services. Using SMS method, one can link their cards by sending a message on
numbers 567678 or 56161. Format to be followed is to mention the UIDPAN space
your 12 digits adhar number space 10 digit PAN number. (UIDPAN ADHAR NUMBER PAN
NUMBER). Another method is through online portal where a fees has to be
submitted on NSDL portal and a simple link request has to be made.Documents
required are Adhar card PAN card and the mobile number as linked with Adhar
What led to the government's decision to link Pan and Adhaar?
The Income Tax Department has observed situations in which one person received
more than one pan allocation and one PAN was assigned to more than one person.
It was required for a taxpayer who is eligible to receive Adhaar to include his
Adhaar in the application form for PAN and return of income in order to have a
preventative method of duplication of the PAN database.
Some people believe that connecting Adhaar and PAN will violate their
fundamental right to privacy.Critics claim that the Section 139AA of the Income
Tax Act's connection of Adhaar with PAN is an attempt to curtail civil freedoms.
However, the centre firmly informed the Supreme Court that the Adhaar Card's
biometric data was secure and had not come into the hands of unauthorised