Aadhaar-PAN Linking: How a Small Mistake Can Increase Your Tax Burden & Ways to Avoid it?

Aadhaar-PAN Linking: The Income Tax Department has released another alert concerning an important tax procedure in India. If your PAN card is not linked to Aadhaar, it may soon become inactive. This will directly affect your finances. Banks and financial institutions will impose TDS (Tax Deducted at Source) at a higher rate on your earnings. Consequently, a substantial part of your hard-earned income will be lost to taxes, and your refund will also face delays.

Why is linking Aadhaar and PAN essential?

According to current tax regulations, it is mandatory to link your PAN with Aadhaar. If they are not linked, your PAN will be deemed inactive. This means you will be unable to file your ITR accurately or receive your refund promptly. Additionally, banks and other institutions will apply a higher TDS rate on your income.

What are the potential consequences?

Imagine you typically face a 10% TDS on your yearly income. However, if your PAN becomes inactive, this rate could rise to 20%. This implies that double the amount will be deducted from your earnings. Many individuals dismiss this as a simple “formality,” but in truth, it can disrupt your financial planning.

How can you link them?

Linking your PAN and Aadhaar is quite straightforward.

– You can link them online by visiting the e-filing portal of the Income Tax Department.

– If you prefer not to use the online option, you can also complete this process by going to the PAN service center.

– Before you link them, make sure that the name, date of birth, and other details on your Aadhaar and PAN match exactly.

Expert advice

Financial experts warn that underestimating the importance of Aadhaar-PAN linking can be risky. It’s not merely about tax savings; it’s about your financial credibility and future plans.

In the digital tax landscape, even minor errors can lead to significant losses. Timely completion of Aadhaar-PAN linking will not only help you save on taxes but also safeguard your hard-earned money. Keep in mind, this is not just a formality; it’s a safeguard for your financial security.

How to link PAN-Aadhaar sitting at home?

Visit the Income Tax Department website www.incometax.gov.in.

Go to the Quick Links section on the page and click on Link Aadhaar.

Now enter PAN, Aadhaar and mobile number in the new window opened on the screen.

Now select the option ‘I validate my Aadhaar details’.

By doing this, you will receive an OTP on your registered mobile number.

Enter the one-time password in the space provided and click ‘Validate’.

After this entire process, your PAN will be linked to Aadhaar Card.