CBDT vide Notification No. 17/2022 dated 29.03.2022 in G.S.R. 229(E) through Income-tax (Third Amendment) Rules, 2022 amended Rule 114 of the Income-tax Rules, 1962 (‘Rules’) to provide for late fees of Rs. 500 where PAN-Aadhaar is linked within 30.06.2022 and Rs. 1000 in other cases.
Section 139AA of the Income-tax Act, 1961 (‘Act’) states that every person who has PAN as on July 1, 2017 is required to link his PAN with his Aadhaar number. If the PAN is not linked by Aadhaar by a date to be notified by the government then PAN would become invalid. The consequence of PAN being invalid was substituted with the consequence of being PAN becoming inoperative by the Finance (No.2) Act, 2019 w.e.f 01.09.2019.
Earlier, CBDT vide Notification No. 11/2020 dated 13-02-2020 provides that where a person, who has been allotted the permanent account number as on 01.07.2017 and is required to intimate his Aadhaar number under section 139AA(2), has failed to intimate the same on or before the 31st day of March, 2020, the PAN of such person shall become inoperative immediately after 31-03-2020 for the purposes of furnishing, intimating or quoting under the Act.
It further states that where a PAN has become inoperative, then it shall be deemed that he has not furnished, intimated or quoted the PAN as required under the law and he shall be liable for all the penal consequences under the Act for not furnishing, intimating or quoting the permanent account number (PAN).
CBDT also inserted Rule 114AAA for prescribing the manner of making permanent account number (PAN) inoperative.
Government has on many occasions extended the last date for linking PAN with Aadhaar as per the provisions of section 139AA. In this regard, the last date to link PAN with Aadhaar is extended to 31st March, 2022 vide Notification No. 113/2021 dated 17.09.2021.
Finance Act, 2021 has inserted a new Section 234H to levy a fee for default relating to the intimation of the Aadhaar Number. Accordingly, if a person is required to intimate his Aadhaar Number under Section 139AA(2) and such person fails to do so within the notified date, he shall be liable to pay a fee, as may be prescribed, not exceeding Rs. 1,000 at the time of making such intimation after the notified date.
As per the requirement of the provisions of section 234H, the Board has now prescribed and quantified the fees for failure to link the PAN with his Aadhaar.
The Board has also amended the provisions of Rule 114AAA to provide that the PAN shall become inoperative if the same is not linked to Aadhaar by 31st March 2022.
Rule 114AAA(2) of the Rules in case the PAN has become inoperative due to non-linking of PAN-Aadhaar by the individual, it shall be deemed that he has not furnished, intimated or quoted the permanent account number and he shall be liable for all the consequences under the Act for not furnishing, intimating or quoting the permanent account number.
The notification provides that the Board will specify the date from which this sub-rule will take effect.
Update:
CBDT specifies ‘Specified Date’ from which PAN will become inoperative under Rule 114AAA(2)
The notification states that every person who is required to intimate his Aadhaar number to the income-tax department as per section 139AA, fails to do so by the notified date shall, at the time of subsequent intimation of his Aadhaar number, be liable to pay, by way of fee, an amount equal to—
(a) Rs. 500, in a case where such intimation is made within three months from the notified date as per section 139AA(2) of the Act; and
(b) Rs. 1000, in all other cases.
As stated above, the last date to intimate the Aadhaar Number to the income-tax department is 31.03.2022. Hence, if the Aadhaar Number is linked with PAN within three months by 30.06.2022 then the late fees of Rs. 500 is payable. If the same is done after 30.06.2022, late fees of Rs. 1000 is payable.
In this context, the Board has released a Press Release on 30th March, 2022 which reads as under-
Under the provisions of the Income-tax Act, 1961 (“the Act”), every person who has been allotted a PAN as on 1st July, 2017 and is eligible to obtain Aadhaar Number, is required to intimate his Aadhaar to the prescribed authority on or before 31st March, 2022. On failure to do so, his PAN shall become inoperative and all procedures in which PAN is required shall be halted. The PAN can be made operative again upon intimation of Aadhaar to the prescribed authority after payment of a prescribed fee. In order to mitigate the inconvenience to the taxpayers, as per Notification No.17/2022 dated 29th March, 2022, a window of opportunity has been provided to the taxpayers upto 31st of March, 2023 to intimate their Aadhaar to the prescribed authority for Aadhaar-PAN linking without facing repercussions. As a result, taxpayers will be required to pay a fee of Rs. 500 up to three months from 1st April, 2022 and a fee of Rs.1000 after that, while intimating their Aadhaar. However, till 31st March, 2023 the PAN of the assessees who have not intimated their Aadhaar, will continue to be functional for the procedures under the Act, like furnishing of return of income, processing of refunds etc. A detailed Circular No.7/2022 dated 30.03.2022 has also been issued in this regard. After 31st March, 2023, the PAN of taxpayers who fail to intimate their Aadhaar, as required, shall become inoperative and all the consequences under the Act for not furnishing, intimating or quoting the PAN shall apply to such taxpayers.
Read the full text of Notification No. 17/2022 dated 29.03.2022 on Quantum of Late Fees for Non-linking of PAN-Aadhaar
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 29th March, 2022
INCOME-TAX
G.S.R. 229(E).—In exercise of the powers conferred by sections 139AA and 234H read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely: ‒
1. Short title and commencement: - (1) These rules may be called the Income-tax (Third Amendment) Rules, 2022.
(2) They shall come into force from the 1st day of April, 2022.
2. In the Income-tax Rules, 1962 (herein after referred to as principal rules), in rule 114, after sub-rule 5, the following sub-rule shall be inserted, namely: —
“(5A) Every person who, in accordance with the provisions of sub-section (2) of section 139AA, is required to intimate his Aadhaar number to the prescribed authority in the prescribed form and manner, fails to do so by the date referred to in the said sub-section, shall, at the time of subsequent intimation of his Aadhaar number to the prescribed authority, be liable to pay, by way of fee, an amount equal to, —
(a) five hundred rupees, in a case where such intimation is made within three months from the date referred to in sub-section (2) of section 139AA; and
(b) one thousand rupees, in all other cases.”.
3. In the Principal rules, in rule 114AAA, —
(a) in sub-rule(1), for the figures “2020”, the figures “2022” shall be substituted;
(b) after sub-rule (2), the following proviso shall be inserted, namely:-
“Provided that the provisions of this sub-rule shall have effect from the date specified by the Board.”;
(c) in sub-rule (3), for the figures “2020”, the figures, words and letter „2022, after payment of fee in accordance with sub-rule (5A) of rule 114,‟ shall be substituted.
[Notification No. 17/2022/F. No. 370142/14/2022-TPL]
SHEFALI SINGH, Under Secy. Tax Policy and Legislation
Note: The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii) vide number S.O. 969 (E), dated the 26th March, 1962 and last amended by the Income-tax (2nd Amendment) Rules, 2022, vide notification number G.S.R. 24(E) dated 18th January, 2022.
Download CBDT Notification No. 17/2022 dated 29.03.2022 on Quantum of Late Fees for Non-linking of PAN-Aadhaar in pdf format
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