Definition
PAN-Aadhaar Linking
PAN-Aadhaar linking is the mandatory connection of your Permanent Account Number with your Aadhaar, without which the PAN can become inoperative.
The government requires individuals to link their PAN with Aadhaar. A PAN that is not linked can become inoperative, which disrupts filing returns, claiming refunds, and conducting high-value financial transactions, and can lead to higher TDS/TCS being deducted.
Linking is done online through the income-tax portal, and a fee may apply for linking after the original deadline. An inoperative PAN can usually be reactivated by completing the linking and paying any prescribed fee.
Because PAN is essential for banking, investing and taxation, keeping it operative and linked to Aadhaar is a basic compliance step every taxpayer should complete.
Related terms
- ITR (Income Tax Return) TypesITR forms are different return formats (ITR-1 to ITR-7) prescribed for different categories of taxpayers and income sources.
- TCS (Tax Collected at Source)TCS is tax collected by a seller from the buyer on certain transactions and remitted to the government, which the buyer can later claim as credit.
- TDSTax Deducted at Source is tax withheld by the payer and deposited with the government on your behalf.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.