After extending the deadline twice in September and December last year, the income tax department seems to be in no mood to further extend the date for linking PAN card with Aadhaar card. The linking of Aadhaar with the PAN is expected to help fintech startups to complete KYC without PAN cards.
In a tweet, on Monday (March 16), the income tax (IT) department announced that the last date to link PAN with Aadhaar is March 31, 2020. It also said that Income taxpayers can link them by either via SMS or on the online portal of the IT department’s e-filling website.
For linking PAN with Aadhaar via SMS, one needs to send a message to either 567678 or 56161. This message will have Aadhaar and PAN number in the following format: UIDPAN<12 digit Aadhaar number><10-digit PAN number>.
Related Article: Aadhaar-PAN Linking Extended To June 30 Amid Coronavirus Outbreak
However, the notification also said PAN cardholders will be able to carry out transactions as soon as they link PAN with Aadhaar. However, users might get fined for not linking the two documents. An ET report said that the inoperative PAN cardholders might have to pay INR 10K to the IT department to make PAN operational again.
Citizens can also link their PAN and Aadhaar by visiting nearby PAN service centres of National Securities Depository Limited (NSDL) and UTI Infrastructure Technology And Services Limited (UTIITSL) via Aadhaar-based biometric verification.
After this, the PAN card of an individual will become inoperational. This means that PAN cardholders will not be able to use it as proof for any financial transactions such as banking, investing, income tax returns and more, according to a Central Board of Direct Taxes (CBDT) notification dated February 13.
Previously, the Supreme Court, in September 2018, had ruled that Aadhaar is mandatory only for filing income tax returns and for the allotment of PAN, and won’t be essential for opening bank accounts or getting SIM cards from telecom operators. The apex court had also barred the use of Aadhaar database for KYC purposes by telcos and NBFCs. But with everyone’s PAN account linked with Aadhaar, the government now might allow NBFCs and fintech startups to use the Aadhaar database to complete the KYC of their users.
MoneyTap cofounder and CEO Bala Parthasarathy had earlier told Inc42 that while Aadhaar-enabled verification will free up banks and finance companies to carry out eKYC and eSign, it would also lower the GST slabs for businesses.