InvestorQ : Why should one link his/her bank account with PAN?
Tanya Mehta made post

Why should one link his/her bank account with PAN?

Answer
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Priyanka Singh answered.
1 year ago


The Income Tax Department, after making it mandatory to link one’s PAN card with Aadhaar for filing income tax returns (ITRs), has now made it mandatory to link one’s bank account with his/her PAN card in order to receive the income tax refunds.

Thus, it is very important for Indian citizens to link their bank accounts with their PAN details.

In a statement, the Income Tax Department said that it doesn’t matter what kind of a bank account one has- savings, current or overdraft, but the account must be linked with PAN in order to receive e-refunds.

Income tax refunds are paid out to those individuals whose tax deducted at source (TDS) has been cut excessively vis-à-vis the investments made. An individual’s tax is cut from his/her salary in the form of TDS. This is the tax amount the individual’s employer cuts before paying the individual his/her salary and pays it to the government.

Depending on the investment declarations provided by the individual, the company calculates the individual’s tax liability and accordingly deducts TDS every month before paying the individual his/her salary. An individual could make more investments over the course of the year and hence, his/her tax liability could decrease. In such a situation, when the individual avails more deductions, then the excess TDS amount, that was deducted from his/her salary, is refunded to him/her via income tax refund.

Thus, in order to get this income tax refund, it is now imperative that individuals link their bank accounts with PAN details.