If you do not connect your PAN card to Aadhaar card within the 31 March deadline, the income tax department may charge you a penalty of Rs 10,000 for using an inoperative Permanent Account Number (PAN). The IT department previously announced that all unlinked PAN cards will be considered “inoperative” and now another notification has been released that these PAN cardholders would face the consequences of not furnishing PAN under the Income Tax Act.
“Typically, when a PAN becomes inoperative, it will be assumed that PAN has not been furnished as required by the law and a penalty of Rs 10,000 may apply as per Section 272B of the Income Tax Act,” BankBazaar CEO Adhil Shetty said.
In this way, using a PAN card as ID proof for non-tax related purposes like opening a bank account or applying for a driving license should not attract a penalty.
However, there will be problems if the bank account opened using an inoperative PAN has transactions that bring it under the purview of income tax. For instance, if you deposit or withdraw cash above Rs 50,000 PAN card required.
Nangia Andersen Consulting Associate Director, Mridhu Malhotra said, in consideration of the penalty provisions under Section 272B and recent notification, it could be understood that an inoperative PAN will lead to the non-furnishing and non-quotation of PAN, which is compulsory according to section 139A of the Act. Section 272B(1) imposes a fine of Rs 10,000 on failure to comply.
“Also, in case of specified transactions the penalty would be imposed for each such default i.e. for every single non-compliance for the specified transaction the assessee will have to pay the penalty,” Malhotra said.
However, once you link your PAN with Aadhaar, the PAN will become operational and no penalties applicable after the link date. Those with inoperative PAN cards must remember that they need not reapply for a new PAN card as once the linking is done, your card becomes valid again. You can stay connected with our web page for more Stock marketing and Business updates.