Year 2022 might have begun with a blast with many ideas for the future. You may be planning your savings and investments, but that plan will go for a toss if you haven’t got some of the basics in place. One of the most important steps of investing is to get your documents in order. If you have a PAN and Aadhaar, make sure you link the two latest by March 31, 2022.
Not doing so will make it nearly impossible for you to use a financial instrument. Forget investing, you won’t be able to even open a bank account or withdraw money from your investments.
Even if you don’t want to open a bank account or make an investment, you still need to do this because PAN cards without Aadhaar will be considered invalid.
The last date has been extended. Earlier, the last date was September 30, 2021. The extension has been provided because of the difficulties people are facing due to a re-surge in Covid-19 cases.
Penalties To Be Aware Of
As of now, linking PAN and Aadhaar is free of cost. But after March 31, this step will cost you Rs. 1,000. Section 234H of the Income Tax Act, 1961, deals with the late fees payable on account of failure to intimate the Aadhaar number to the Income Tax Department (i.e., link the PAN with Aadhaar). The Section will be made effective from April 1, 2021.
If you have applied for a PAN, then quote your Aadhaar number or enrollment ID in the application.
An unlinked PAN will become invalid, and should you knowingly or unknowingly use an invalid PAN, the penalty is 10 times more–Rs. 10,000. Under Section 272N of the income-tax Act, if a person produces a PAN card that is no longer valid, the Assessing Officer may direct such a person to pay Rs. 10,000 as penalty.
Without a valid PAN card, all investments that require PAN like bank account, mutual funds, stock market, and even cryptocurrencies will be out of your reach.
Linking PAN and Aadhaar is easy. It can be done through the income tax website https://incometaxindiaefiling.gov.in/ or via SMS.
So, without wasting any time, seed your PAN card with Aadhaar. Not doing so will make life very inconvenient. Not to mention the penalties of Rs. 1,000 and Rs. 10,000.