Only 5 days are left to link your Aadhaar with PAN card, and if you fail to do so you will not be able to file your income tax return (ITR) on time. This could prove to be a costly mistake as you might need to pay Rs 5,000 as a penalty if you fail to file the ITR by July 31st this year.
According to new income tax rules, for the financial year 2017-18 (Assessment Year 2018-2019) and onwards you will have to pay a penalty of Rs 5,000 if the return is furnished after July 31st but on or before December 31, 2018. The penalty doubles with a late fee of Rs 10,000 if ITR is filed after December 31. There is, however, some relief for people having an income of less than Rs 5 lakh, as the penalty amount for them is Rs 1,000.
Not only penalty, you might also have to pay interest if there is any tax liability. The simple interest is charged at the high rate of 1 per cent per month for the period of delay under section 234A of the Income Tax Act.
In case of refund, the late filing will again work against you. As you will lose interest amount of 4 months even if you delay filing ITR by one day. When return is filed before the due date, the interest amount is worked out from the first day of April of the assessment year to the processing date of the refund amount. In case you missed the deadline of 31st July, then interest is calculated from ITR filing date to the refund processing date
The deadline to link the Aadhaar and PAN card has got extended several times and previously the deadline to link Aadhaar and PAN was March 31, 2018. The last date of June 30 for linking Aadhaar and PAN card has come after the Supreme court direction that the linking of Aadhaar with various services should be delayed until the final judgement. However, Non-resident Indians (NRI) do not need link Aadhaar and PAN card.