Rule 162 says a PAN becomes inoperative if the holder required to intimate Aadhaar under section 262(6) fails to, makes it operative within thirty days of intimation and payment of the fee under rule 158, and sets the consequences while it is inoperative — no refund, no interest on the refund, and tax deducted at a higher rate.
162
Rules 2026 · Rule 162
When PAN becomes inoperative under section 262(6)
Rules 131-200
Becoming inoperative and operative (sub-rules 1 and 2). A person allotted a PAN who was required to intimate Aadhaar under section 262(6) and failed to has an inoperative PAN and is liable for the fee under rule 158. After intimation of Aadhaar and payment of the fee, the PAN becomes operative within thirty days from the date of intimation.
Consequences while inoperative (sub-rule 3). From the commencement of the rule until the PAN becomes operative: (a) no refund of tax is made; (b) no interest is payable on the refund for that period; and (c) where tax is deductible or collectible at source under Chapter XIX-B, it is deducted or collected at the higher rate under section 397(2).
Procedure (sub-rule 4). The Principal Director General or Director General of Income-tax (Systems) specifies the formats, standards and procedure for verifying the operational status of a PAN.