Missed Aadhaar-PAN Link? Here’s How It Can Raise Your Tax Burden
Aadhaar-PAN Linking: A Small Mistake Could Cost You Big in Taxes, Know how to avoid it: The Income Tax Department has issued another warning regarding a crucial tax process in India. If your PAN card is not linked to Aadhaar, it may soon become inoperative. This will have a direct impact on your pocket. Banks and financial institutions will deduct TDS (Tax Deducted at Source) at a higher rate on your income. This means a significant portion of your hard-earned money will be lost to taxes, and your refund will also be delayed.
Why is Aadhaar-PAN linking necessary? Under current tax rules, linking your PAN with Aadhaar is mandatory. If it is not linked, the PAN is considered inoperative. This means you will neither be able to file your ITR correctly nor receive your refund on time. Additionally, banks and other institutions will deduct higher TDS on your income.
Let’s say you normally receive a 10% TDS on your annual income. However, if your PAN becomes inoperative, this rate can increase to 20%. This means twice as much money will be deducted from your pocket. Many people ignore this as a mere “formality,” but in reality, it can disrupt your financial planning.
How to Link:
Linking your PAN and Aadhaar is very easy.
- You can link online by visiting the Income Tax Department’s e-filing website.
- If you don’t want to use the online facility, you can also complete this process by visiting a PAN service center.
- Before linking, ensure that the name, date of birth, and other details on your Aadhaar and PAN are exactly the same.
