As per the information disclosed in a Right to Information response from the Central Board of Direct Taxes, a total of 11.5 crore PAN cards faced deactivation due to their failure to link with Aadhaar cards before the designated deadline. The deadline for this linkage expired on June 30 of the current year.
India has a total of 70.24 crore PAN card holders, and among them, approximately 57.25 crore successfully linked their PAN cards with Aadhaar. According to the RTI reply, over 12 crore PAN cards remain unlinked with Aadhaar, out of which 11.5 crore cards have consequently been deactivated for non-compliance.
The RTI was filed by Madhya Pradesh-based activist Chandra Shekhar Gaur, who raised these concerns regarding the penalty and the need for an extension in the deadline for linking PAN with Aadhaar.
When it comes to new applicants for PAN cards, the process of linking Aadhaar and PAN is automatically executed during the application phase. However, for existing PAN cardholders who received their PAN on or before July 1, 2017, it is compulsory to link their PAN with Aadhaar. The RTI response underlines the significance of this requirement, citing subsection (2) of Section 139AA within the Income Tax Act. This subsection makes it mandatory for individuals who were issued a PAN on or before July 1, 2017, to provide their Aadhaar number.
The RTI reply also highlights that this linking of PAN and Aadhaar was supposed to be completed by a specified date, failure to do so resulting in the PAN becoming inoperative. Furthermore, Section 234H of the Income Tax Act specifies that individuals are required to link their PAN with Aadhaar but failing to do so by the given date will be subject to a fee. To reinstate a deactivated PAN card, the CBDT has imposed a penalty of 1,000.
Mr. Gaur questioned the logic behind this fine, considering that the cost of obtaining a new PAN card, excluding the Goods and Services Tax, is only Rs.91. He expressed concerns about how individuals whose PAN cards have been deactivated will manage to file their income tax returns. Additionally, Mr. Gaur called on the government to reconsider and extend the time limits for linking PAN with Aadhaar, suggesting a minimum extension of one year.
Furthermore, the CBDT, in a circular dated March 30, 2022, detailed the consequences of failing to link PAN and Aadhaar by the specified date. It also extended the deadlines for this linking process to June 2023 during that period.
