InvestorQ : Is it true that PAN will be invalid if it isn’t linked with Aadhaar?
Diya Chitale made post

Is it true that PAN will be invalid if it isn’t linked with Aadhaar?

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Roshni Hegde answered.
1 year ago

On 29 May 2019, the RBI (Reserve Bank of India) disclosed the amendment over KYC norms and permitting the use of Aadhar card for account opening. This will allow all Indian banks to open an instant bank account for their customers. Bank will have to use e-KYC based on Aadhaar authentication using One Time Password mode.

India's Fintech industry will face new growth in the industry through the new Aadhar online Online verification.
OTP has resulted in one of the most convenient options for everyone. It helps reduce cost and time for the process involving onboarding a customer.

However, officials had declared their further views over developing the system through a more faster and cost-effective mechanism.

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Sadaf Khan answered.
1 year ago

Yes, the government has notified that if one’s PAN is not linked with his/her Aadhaar card, then the PAN will become invalid. As per the notification, the last date to link one’s PAN with Aadhaar is September 30, 2019.

The previous deadline to link PAN and Aadhaar was March 31, 2019 but, there was uncertainty as to whether PAN will become inactive if not linked with Aadhaar by March 31, 2019.

The reason for this is because as per sub-section (2) of Section 139AA of the Income Tax Act, the last date of linking Aadhaar with PAN was to be notified by the government via notification in the official gazette only and there was no gazette notification notifying the deadline of March 31 for this purpose. This deadline, March 31, was publicised as the deadline only via circulars and notices.

Thus, it is advised that everyone links their PAN to their Aadhaar card because if one’s PAN becomes invalid, the person will be deemed to not possess a PAN and other provisions of the Income Tax Act will apply. This could mean penalty of Rs 10,000 under Section 292B of the Income Tax Act, higher deduction of TDS due to non-availability of PAN, etc.

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1 year ago

PAN and Aadhaar are two different entities. There is no reason to invalidate PAN for its linkage with Aadhaar. The recent news on Aadhaar is only related to it being again available for doing KYC for Banks.