Linking your PAN (Permanent Account Number) card with Aadhaar has become mandatory, as per government regulations. If your PAN is not linked with Aadhaar, it will become invalid under Section 139AA of the Income Tax Act. This means you won’t be able to file your Income Tax Return (ITR) online, and any tax refunds will be delayed or withheld. Additionally, without linking your PAN to Aadhaar, you won't be able to carry out financial transactions like banking transactions exceeding Rs. 50,000, investing in mutual funds or stocks, or opening a bank account.

To link your PAN with Aadhaar, you can visit the official Income Tax e-filing website and follow the instructions, or send an SMS to 567678 or 56161 in the format: UIDPAN . If you fail to link your PAN with Aadhaar by the given deadline, your PAN will become inoperative, disrupting your financial activities.

How to Link PAN Card with Aadhaar via SMS ?

PAN card and Aadhaar card linking is fairly easy, and there are two ways to link your Aadhaar number to PAN: 

Step 1: Making use of the SMS feature

Step 2: Making use of the https://incometaxindiaefiling.gov.in e-filing portal's features

How can I use the income tax e-filing website to link my PAN card with Aadhaar?

To link your PAN with Aadhaar via the Income Tax e-filing website:

1. Visit www.incometax.gov.in.
2. Scroll down and click on "Link Aadhaar".
3. Enter your PAN, Aadhaar, name (as on Aadhaar), and mobile number.
4. If your Aadhaar shows only the year of birth, check the box “I have only year of birth in Aadhaar card”.
5. Agree to validate your Aadhaar details and click "Link Aadhaar".
6. Enter the 6-digit OTP sent to your mobile and click ‘Validate’.

Your PAN will be linked to Aadhaar.

Consequences of Not Connecting PAN to Aadhaar

This will have several negative consequences:

1. KYC Issues: Your PAN is required for Know Your Customer (KYC) processes in banks, clearing houses, and e-wallets. Without it, these services will be disrupted.

2. Higher Tax Deduction: If your PAN is inoperative, the Tax Deduction at Source (TDS) on interest earned from your bank account will increase from 10% to 20% for amounts exceeding Rs 10,000 annually.

3. Penalty: If you miss the deadline, you can still link your PAN and Aadhaar, but you'll incur a penalty of Rs 1,000. Additionally, under Section 272B of the Income Tax Act, a penalty of Rs 10,000 may be levied if your PAN becomes inoperative.

It is important to link your PAN with Aadhaar promptly to avoid these issues.