PAN Linking & Compliance Guide

If PAN is not linked with Aadhaar: 1) PAN becomes inoperative (cannot be used for financial transactions), 2) Cannot file income tax returns, 3) Higher TDS deduction on certain transactions (20% instead of normal rates), 4) May face difficulty in opening new bank accounts, 5) May receive notices from Income Tax Department, 6) Possible penalty of ₹1,000. However, PAN can be reactivated by linking with Aadhaar later. The inoperative status is temporary until linking is done.

No, PAN-Aadhaar linking is completely FREE of cost. There is no government fee for linking PAN with Aadhaar through official channels (Income Tax e-filing portal, SMS facility, etc.). Beware of scams - some fraudulent websites/agents may charge money for this service. Always use official government websites: incometax.gov.in for online linking or send SMS to official numbers only. The process is simple and can be done by anyone without paying any charges.

If names don't match exactly: 1) Minor differences (like Singh/Singh, Kumar/Kumar) are usually accepted, 2) For significant differences, you need to update either PAN or Aadhaar first, 3) Income Tax portal allows minor corrections during linking process, 4) Update PAN through correction process (Form 49A), 5) Update Aadhaar through UIDAI portal. Names should match as per official documents. Date of birth and gender should also match. Linking may fail if there are major discrepancies.

Yes, PAN-bank account linking is mandatory as per Income Tax rules and RBI guidelines. Benefits: 1) Lower TDS on interest income (10% vs 20% if not linked), 2) Compliance with KYC norms, 3) Smooth processing of high-value transactions, 4) Required for certain banking services. Banks are required to deduct higher TDS if PAN is not linked. All types of accounts (savings, current, fixed deposits) need PAN linking if aggregate transactions exceed specified limits. Linking can be done online through net banking.

NRIs (Non-Resident Indians) are generally exempt from PAN-Aadhaar linking requirement if they don't have Indian sourced income. However, if NRIs have income taxable in India, they should link PAN with Aadhaar. NRIs can get Aadhaar if they have spent 182+ days in India. For NRIs without Aadhaar, they need to intimate Income Tax Department about their non-resident status. NRIs should check latest notifications as rules may change. NRIs with only foreign income and no Indian income may not need to link.