Income Tax News: Why is Linking Pan Card With Aadhaar Important? What Happens if You Fail to do it by 31st May 2024

Income Tax News: The Income Tax Department has released a thorough guide on the process of integrating Aadhaar numbers with PAN cards, in an effort to streamline tax procedures and guarantee proper filings. For taxpayers, this is a crucial action since there are a number of repercussions if the deadline of May 31, 2024, is missed.

Importance of Linking PAN Card with Aadhaar

Linking your PAN card to Aadhaar is more than just a formality; it affects your financial transactions and income tax responsibilities right now. These are the reasons it’s essential:

1. Avoiding Higher TDS Rates:Tax Deducted at Source (TDS) rates on different financial transactions and income streams may increase if Aadhaar and PAN are not linked. This might result in unwarranted income deductions.
2. Compliance with CBDT Circular No. 6/2024: In order to receive the advantages mentioned in the CBDT Circular No. 6/2024, which was issued on April 23, 2024, you must link your PAN to Aadhaar prior to the deadline. This circular describes the repercussions of non-compliance and highlights the significance of prompt compliance.

Consequences of Missing 31st May 2024 Deadline

Failing to link your PAN with Aadhaar before the deadline involves serious consequences that might negatively impact your financial situation. If you miss the deadline of May 31, 2024, the following will happen:

1. Inoperative PAN: Your PAN card will stop working, making it useless for carrying out many kinds of financial transactions and tax-related tasks.
2. Non-Refundable Tax Amounts: Any amount of tax refund due under the provisions of the Income Tax Act will not be disbursed to you if your PAN becomes inoperative. This could result in delays and financial inconvenience.
3. Waiver of Interest Payments: Interest payments on tax refunds, which are typically accrued during the period specified under the relevant rules, will not be payable to you if your PAN is inactive.
4. Higher TDS and TCS Rates: The rates listed in sections 206AA and 206CC of the Income Tax Act will apply at a higher rate in situations where tax deduction or collection at source is appropriate. Reduced income and more deductions might result from this.

Simple Steps to Link Aadhaar with PAN

To guarantee adherence and prevent the previously described outcomes, do the following easy actions to link your PAN with Aadhaar:

1. Visit the e-Filing Portal: Access the e-Filing portal and navigate to the ‘Link Aadhaar’ section either from the Quick Links on the homepage or the Profile section after logging in.
2. Enter Details: Provide your PAN and Aadhaar numbers as requested.
3. OTP Verification: Enter your mobile number to receive an OTP for verification purposes.
4. Payment and Submission: Follow the instructions to make any necessary payments and submit your PAN-Aadhaar link request.

Deadline for Income Tax Returns

It’s crucial to remember that the 31st July 2024 deadline is approaching for submitting Income Tax Returns (ITR) for income generated in FY 2023–24 (AY 2024–25). Penalties and late fees may apply if this deadline is missed.

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