PAN-Aadhaar Linkage: Those who have shrugged off the government’s mandate to link PAN and Aadhaar could be in for a rude awakening. As per new regulations, failing to link the two by June 30, 2023, results in the PAN card being marked as ‘inoperative’. This raises a significant roadblock for taxpayers, especially considering the income tax return filing deadline of July 31, 2023.
Reactivating an Inoperative PAN – A Costly Affair
An inactive PAN card can be reactivated, but not without an accompanying cost. To restore their PAN to active status, taxpayers must cough up a Rs 1,000 fine. This reactivation process is not instantaneous and may take up to 30 days, causing potential issues for those looking to file their income tax returns in a timely manner.
Missing the Tax Filing Deadline – More than Just a Late Submission
Once a PAN is reactivated, taxpayers may still find themselves at risk of missing the July 31 deadline for filing income tax returns due to the delay in PAN activation. As a consequence, these returns will be tagged as ‘belated ITRs’, incurring an additional late fee. The penalty surges to Rs 5,000 for those with a total income exceeding Rs 5 lakh.
The Rs 6,000 Sting – A Result of Non-Compliance
If all these factors combine – an inoperative PAN, late filing of the ITR, and an income exceeding Rs 5 lakh – taxpayers could end up shouldering a cumulative cost of Rs 6,000. This includes the Rs 1,000 fine for PAN reactivation and the Rs 5,000 penalty for delayed income tax return filing. The message is clear – prompt linkage of PAN and Aadhaar can save taxpayers from a significant financial blow.
Lower Income Brackets – Not Exempt from Penalties
For those whose total income falls below Rs 5 lakh, the penalties aren’t waived entirely. They are still subject to a Rs 1,000 fine for a late ITR filing, in addition to the Rs 1,000 fine for PAN-Aadhaar linkage. Additionally, any unpaid tax liabilities may accrue interest, further exacerbating the financial burden.
In summary, the recent changes in the PAN-Aadhaar linkage process illustrate the government’s commitment to ensuring compliance. By failing to link their PAN with Aadhaar, taxpayers face not only potential hurdles in their tax filing process but also substantial financial penalties. The clock is ticking, and timely action can save a significant amount of hassle and expense.
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