• Notification Date: 28-03-2024
• Notification No: N/A

You can File ITR even if PAN and Aadhaar not Linked

It has been circulated by the Income Tax Department, that if you have an inoperative PAN because you forgot to link it with Aadhaar by June 30, 2023, then you can still file your income tax return. 
 
“Income tax return can be filed even if Aadhaar is not linked with PAN or even when PAN is ‘inoperative’. Please fill your income tax return early, and avoid last week's rush,” stated the Income Tax Department on its website homepage. 

The last date to file ITR for individuals whose accounts are not required to be audited for FY 2022-23 (AY 2023-24) is July 31, 2023, i.e., this Monday. 

How to File ITR with an Inoperative PAN: 
According to Himanshu Sachdeva, Senior Associate, TAS LAW, a Delhi-based law firm, “The ITR e-filing portal does not mandate an individual to link their PAN with Aadhaar at the time of filing ITR.” This means that even if you are yet to link your PAN with Aadhaar, the ITR e-filing portal will not stop you from filing your income tax return at any point in time. 

There is also no difference in the process of filing ITR even if PAN is inoperative. An individual can log in to their account on the income tax e-filing portal. Once logged in, click on e-file>income tax return>file income tax return. One can follow the steps and file their ITR with an inoperative PAN for FY 2022-23 (AY 2023-24) on or before July 31, 2023. 

Do remember to verify your filed ITR. Income tax laws allow an individual 30 days to verify the filed ITR. If the filed ITR is not verified within 30 days, then it will be deemed that an individual has not filed ITR. 

“Currently, individuals with an inoperative PAN can also file income tax return and pay taxes. However, this filed ITR cannot be verified using Aadhaar OTP. This is because their PAN is not linked with Aadhaar. An individual can use other verification methods such as sending a signed copy of ITR V to CPC, Bangalore or generate EVC via net-banking, ATM, etc for ITR verification,” said CA Abhinit Singh, Founder, Ready Accountant, a Kolkata based educational institution. 

What if you Have to Pay Taxes while Filing ITR? 

Do note that at the time of making tax payments, an active PAN is required. It does not matter whether the PAN is operative or not. “Active PAN means that the said PAN is not cancelled or made inactive by the income tax department. An operative PAN means that it is linked with Aadhaar. Inoperative PAN means that it has not been linked with Aadhaar,” said Sachdeva. 

The income tax e-filing portal will allow an individual to pay tax at the time of filing ITR with an inoperative PAN. 

According to Dr. Suresh Surana, founder, RSM India, a tax, audit and consultancy company, “The income tax return can be filed even if the income taxes are not paid at the time of filing the income tax return. The payment of such income tax can be made irrespective of the PAN being inoperative as an inoperative PAN does not constitute an inactive PAN.” 

The income tax e-filing portal allows an individual to use the ‘pay later’ option. Using this option an individual can file their ITR first and pay the pending taxes later. 
 
As per the income tax department, “If you opt to Pay Later, you can make the payment after filing your Income Tax Return, but there is a risk of being considered as a taxpayer in default, and liability to pay interest on tax payable may arise.” 

Once you have entered the income details, the ITR form will automatically calculate the taxes that you have to pay. On the payment option, the ITR e-filing portal asks an individual to either pay now or pay later. 

What if you have an Income Tax Refund? 

Once you have filed ITR and you are supposed to get an income tax refund, the tax department will not release your tax refund. “ITRs can be filed without having the Aadhaar-PAN link completed, however, such ITR filings would render the user ineligible to avail refunds and interest on such tax refunds till the time PAN is linked with Aadhaar,” said Soayib Qureshi, Partner, PSL Advocates & Solicitors, a Delhi based law firm. 

Do note that an individual can still claim rebate under section 87A even if PAN is inoperative. “This is because an inoperative PAN does not affect your eligibility for the 87A rebate,” said Singh.