What Happens If PAN Becomes Inoperative? How To Activate It

PAN card is an essential document, and if it becomes inoperative, citizens will no longer be able to avail a number of important financial services, including ITR refund. They may also have to pay extra taxes in the form of TDS if PAN is inoperative. Here’s how your PAN may become inoperative and what services will be affected following that.

June 30 was the last date to link PAN and Aadhaar. Those who missed that deadline will not be able to use PAN card for any purpose as that has become inoperative. In case the PAN is already quoted somewhere, it will be deemed that the PAN has not been furnished, intimated or quoted. PAN serves as a universal identifier for financial transactions.

Services that stop if PAN becomes inoperative:

1) The person shall not be able to file income tax return using the inoperative PAN

2) Pending returns will not be processed

3) Pending refunds cannot be issued to inoperative PANs

4) Pending proceedings as in the case of defective returns cannot be completed once the PAN is inoperative

5) Tax will be required to be deducted at a higher rate as PAN becomes inoperative.

According to a CBDT circular, if a person’s PAN becomes inoperative, “it shall be deemed that he has not furnished, intimated or quoted that permanent account number”.

Apart from that, according to a CBDT circular dated March 30, 2022, “Tax will be required to be deducted at a higher rate as PAN becomes inoperative.”

If your PAN (permanent account number) was not linked with Aadhaar by the deadline of June 30, 2023, then your PAN has become inoperative. As a result, the tax deducted at source (TDS) for you will be higher at 20 per cent or the applicable rate, whichever is higher, instead of the normal rate of TDS.

The normal TDS rate is as low as 1 per cent on various incomes and investments. Tax deducted at source (TDS) is deducted from income at its source, including bank deposit interest, rents, consultation fees, commissions, cryptocurrency or virtual digital assets, and stamp duty, among others.

Inoperative PAN? Here’s what you should do now

Visit the official website https://www.incometax.gov.in/iec/foportal/ and go ahead with the Aadhaar-Pan linking request. Next, fill in the details and click on CHALLAN NO./ITNS 280 for Aadhaar-PAN linking request submission. Select the mode of payment and enter the PAN by choosing Assessment Year (AY) with a complete address. The last step is to enter the Captcha code and proceed with submitting. It will take a maximum of one month to make your PAN card operative again.