11.48 Cr PANs Unlinked: Govt Collects Rs 600 Cr in Penalties

The Permanent Account Number (PAN) is a unique identification number issued by the Income Tax Department to taxpayers in India. The Aadhaar is a 12-digit biometric identity number issued by the Unique Identification Authority of India (UIDAI) to residents of India. The government has made it mandatory to link PAN with Aadhaar for filing income tax returns, availing various subsidies and benefits, and conducting financial transactions.

Data on PAN-Aadhaar linking

According to the Minister of State for Finance Pankaj Chaudhary, as on January 29, 2024, the number of PANs not linked with Aadhaar, excluding exempted categories, was 11.48 crore . The last date for linking PAN with Aadhaar was June 30, 2023. The Income Tax Department had said that the PAN of taxpayers who failed to link their Aadhaar would become inoperative from July 1, 2023 and no refunds would be made against such PANs. Also, tax deducted at source (TDS) and tax collected at source (TCS) would be deducted/collected at higher rates. The PAN could be made operative again by paying a late fee of ₹1,000.

Penalties collected by the government

The government has collected over ₹600 crore as penalty for delay in linking PAN with Aadhaar from July 1, 2023 to January 31,2024 . This amount is expected to increase as more taxpayers pay the late fee to reactivate their PANs. The penalty is aimed at ensuring compliance and discouraging evasion of taxes.

Benefits and challenges of PAN-Aadhaar linking

The government has claimed that linking PAN with Aadhaar would help in curbing black money, preventing tax fraud, enhancing transparency, and simplifying tax administration. It would also enable taxpayers to access various online services offered by the Income Tax Department, such as e-filing, e-verification, e-assessment, and e-refund.

However, some challenges and issues have also been raised regarding the process of PAN-Aadhaar linking. These include technical glitches, mismatch of data, privacy concerns, lack of awareness, and exclusion of certain categories of taxpayers. Some petitions have also been filed in the Supreme Court challenging the constitutional validity of the mandatory linking of PAN with Aadhaar.

Conclusion

The government has collected over ₹600 crore in penalties for delayed PAN-Aadhaar linking, with 11.48 crore PANs still unlinked. The process of linking PAN with Aadhaar is expected to bring several benefits for the taxpayers and the tax authorities, but it also faces some challenges and controversies. The government and the Income Tax Department have urged the taxpayers to link their PAN with Aadhaar at the earliest to avoid any inconvenience or penalty.