For those who are yet to link their PAN with Aadhaar, this extension will come as a relief as not linking the two will lead to the PAN becoming ‘inoperative’, as per current income tax laws.
- Meaning of ‘inoperative PAN’
According to a CBDT notification dated February 13, 2020, the term ‘inoperative PAN’ would mean that an individual does not have a PAN. Further, he/ she will not be able to make financial transactions where PAN is mandatorily required to be intimated or quoted as per income tax laws.
The notification further clarified that once an inoperative PAN is linked with Aadhaar , then the PAN will become operative once again and the individual will be able to do all the financial transactions.
However, chartered accountants advise people to link the two as soon as possible. According to income tax…