Aadhaar-PAN link: The income tax department has given the deadline of 30th June as the deadline for the PAN-Aadhaar link. Even the largest public sector bank State Bank of India has informed that customers will not enjoy enjoying a seamless banking service in case they failed to do so.
If PAN and Aadhaar are not linked, then PAN will be rendered inactive and cannot be quoted for conducting specified transactions. The income tax department might impose a penalty on you. You will not only be liable to pay a fine of up to Rs1,000 but your PAN will also become invalid.
Besides the above actions, all investments that mandates requirement of PAN including bank account, mutual funds, stock market, and other investments are also going to be affected since investor won't be allowed any transaction as a result of incomplete Know Your Customer (KYC).
How will your investments get affected?
Financial experts have advised investors to immediately link the two before the given deadline. In case you haven’t linked the two it will make your PAN card inoperative and cause incomplete KYC. The incomplete KYC will not allow further transactions in banks, mutual funds, and any other investments.
Also, note if a PAN card is not seeded with the bank account, the bank will charge double TDS (Tax Deduction at Source), which is 10 per cent in case of PAN seeded bank account, according to financial advisor Pankaj Mathpal, quoted in Mint publication.
It will become difficult to process any transaction due to incomplete KYC. You cannot invest nor withdraw money from investments in mutual funds, equity, or any other option where PAN is a must for KYC. Besides due to an inoperative PAN card you will not be able to retrieve statements as NSDL and CDSL and unable to manage investment records.
Another financial advisor Jitendra Solanki told Mint that the investor's monthly SIP may also get discontinued in case of incomplete KYC, and the investor will be neither allowed to invest nor withdraw money from mutual fund investments.