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Last Date to Link Aadhaar with PAN extended to 31st December

The last date to link Aadhaar with PAN to file income tax return was 31st August, which has been extended to December 31st now. The Government has declared 4 months of the deadline for linking PAN with Aadhaar.

Earlier the deadline to do so was on 31st July which was further extended to Aug 31st. There were reports that no further extension will be given but the sources in the income tax department are telling that it will be extended till 31st December. This extension has been given keeping in mind the recent Supreme Court decision that Privacy is a fundamental right. Another 5 Judge Constitutional Bench of Supreme Court is going to hear whether Aadhaar as a scheme violate that right or not.

The case is scheduled to be heard on Nov 5th and there were speculations that government will not change the deadline of PAN and Aadhaar Linkage. Given the later deadline, people will now wait for the SC decision and will link their documents with Aadhaar only after SC clarifies that Aadhaar does not violate a Citizen’s Privacy Rights.

Also, if in case a person has filed income tax return on the stipulated time but haven’t linked the two documents, the Income Tax Return (ITR) won’t be taken up by the department for processing.

Recently, the government has extended the deadline for the same again for three more months i.e. March 31st 2018. And this is the third extension given by the government to individuals to complete the linkage, keeping their convenience in mind.

Consequences for Income Tax Return (ITR) not taken up for Processing

1. In case of ITR not processed, it will be nullified by the income tax department and will be treated as if the taxpayer hasn’t filed income tax return for the financial year of 2016-17.

2. The department of income tax may send a legal notice under the section 142. The assessing officer may impose a penalty of Rs. 5,000 as a penalty.

3. The tax payer won’t be able to claim the losses such as capital loss or businesses loss.

4. The tax payers won’t be able to claim the refunds, as it shall not be granted in case ITR is not processed.

5. Interest under section 234 A, B, C will be applicable as the case may be, i.e., if the tax is payable.

Section 139 AA (2) of the Income Tax Act says that every person having PAN as on July 1, 2017, and is eligible to obtain Aadhaar, must intimate his Aadhaar number to the tax authorities. Due to additional compliance requirements, this year, the government has given relaxation to link PAN and Aadhaar till December 31, 2017. However, it has not clarified what laws shall apply in case an Individual fails to link PAN and Aadhaar,
says Chetan Chandak, Head of Tax Research, H&R Block India.

The Government has also declared that 31st December is the deadline to link their Bank accounts with the Aadhaar.

This linkage is mandatory only for the people who have Aadhaar cards or eligible to obtain Aadhaar cards.

Exempted category for the linkage of Aadhaar and PAN are:

Those categorized as Non-resident Indians as per the Income Tax Laws

  • Not a citizen of India
  • Is of age 80 years or more at any time during the tax year
  • Residents of the states of Assam, Meghalaya and Jammu and Kashmir

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