New Delhi: The Finance Ministry in a statement on Wednesday said that non-linking of PAN with Aadhaar number will lead to a penalty of Rs 500/- upto three months from April 1^st and a fee of Rs 1K thereafter. Nevertheless, the non-linked PAN will remain operational till March 31^st, 2023.

Under the provisions of the Income Tax Act, 1961, it is mandatory to link PAN and Aadhaar on or before March 31^st, 2022. Finance Ministry in its statement said that on failure to do so PAN shall become inoperative and all procedures in which PAN is required shall be halted. The PAN can be made operative again upon intimation of Aadhaar to the prescribed authority after payment of a prescribed fee.

In order to mitigate the inconvenience to the taxpayers, as per Notification No 17/2022 dated March 29^th, 2022, a window of opportunity has been provided to the tax payers upto March 31^st, 2023 to intimate their Aadhaar to the prescribed authority for Aadhaar-PAN linking without facing repercussions.

However, till March 31^st, 2023 the PAN of assesses who have not intimated their Aadhaar, will continue to be functional for the procedures under the Act, like furnishing of return of income, processing of refunds etc.