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Govt Receives Rs 600 Cr Penalty for PAN-Aadhaar Linking Delay; 11.48 Cr PANs Are Still Unlinked

The penalty for not linking PAN with Aadhaar within the given timeframe was Rs 1,000

The Indian government has collected a staggering amount of over Rs 600 crore as penalty from defaulters who failed to link their Permanent Account Number (PAN) with their Aadhaar card within the stipulated deadline. As per the latest data revealed by the Minister of State for Finance, Pankaj Chaudhary, in a written reply in the Lok Sabha, the number of PAN cards not linked with Aadhaar, excluding exempted categories, as of January 29, 2024, stands at 11.48 crore.

The penalty for not linking PAN with Aadhaar within the given timeframe was Rs 1,000, and the total collection of fee from individuals who failed to link their PAN with Aadhaar is a whopping ₹601.97 crore from July 1, 2023, to January 31, 2024. It is noteworthy that the deadline for linking PAN with Aadhaar was June 30, 2023, which was pushed several times over the years due to the controversial nature of the move by the Indian government.

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For the uninitiated, PAN is a unique alphanumeric identification number issued primarily to Indian taxpayers who pay direct taxes. On the other hand, Aadhaar is a 12-digit individual identification number that serves as proof of identity and address for Indian residents. However, Aadhaar has been the subject of several controversies, especially surrounding its validity as proof of citizenship or date of birth. Last month, the Indian government declared that Aadhaar is not a proof of citizenship or date of birth, and Aadhaar cards and downloads now include that disclaimer on the ID itself.

PAN cards will become inoperative if taxpayers fail to link  with Aadhaar

The Minister of State for Finance was responding to a query by TMC MP Mala Roy on February 5, Monday. As per the Income Tax Department Order, PAN cards will become inoperative if taxpayers fail to link their documents with Aadhaar within the deadline. Moreover, no refunds would be made against such PANs. Also, a failure to link would attract a higher rate of Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) deduction/collection.

According to an RTI reply to a query by the Central Board of Direct Taxes in November last year, out of a total of 70.24 crore PAN cardholders, 57.25 crore had linked their cards to Aadhaar. More than 12 crore PAN cards, of which 11.5 crore have been deactivated, have not been linked to Aadhaar, as per the RTI reply.

In 2017, the Supreme Court upheld the government’s decision to force the linking of PAN cards with Aadhaar, albeit while reducing the penalty for those without Aadhaar. However, the ruling courted controversy for “uncritically accepting the contentions of the government.”

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Dr. Shubhangi Jha

Avid reader, infrequent writer, evolving

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