Summary of this article
No tax refunds, higher TDS/TCS rates, if PAN is not linked with Aadhaar by Dec 31, 2025 deadline.
NRIs, seniors over 80, non-citizens, and few more exceptions are there who don't need to link Aadhaar with PAN.
Already inactive PANs can be reactivated after paying a non-refundable fee.
The deadline to link Aadhaar with the Permanent Account Number (PAN) is December 31, 2025.
Failing to link PAN with Aadhaar by this date will result in the inactivation of PAN and cause hassles for future financial activities. While linking is automatically done for new applicants, those who have applied for PAN based on their Aadhaar enrolment ID before October 1, 2024, must link their Aadhaar with PAN by the end of this year.
“Every person who has been allotted permanent account number on the basis of Enrolment ID of Aadhaar application form filed prior to the 1st day of October, 2024, shall intimate his Aadhaar number to the Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems) or the person authorised by the said authorities on or before the 31st day of December, 2025 or such date as may be specified by the Central Board of Direct Taxes in this behalf,” reads the notification dated April 3, 2025, issued by the Central Board Of Direct Taxes.
What Will Happen If Aadhaar-PAN Linking Is Not Done
Not linking PAN with Aadhaar by the last date will mean an inoperative PAN. According to Section 139AA of the Income-tax Act, 1961, every person who has been allotted PAN on or after July 1, 2017, and who is eligible to get an Aadhaar number, was required to intimate this to the income tax department by March 31, 2022.
Failure to comply with this rendered such PANs inoperative.
Now, the PANs that were applied before October 1, 2024, based on Aadhaar enrolment ID, will become inoperative if not linked with Aadhaar by December 31, 2025.
What Will Happen If PAN Becomes Inoperative
According to the CBT notified Rule 114AAA of the Act, if a person’s PAN becomes inoperative, it will result in no refund of income tax and interest thereof, if any, from the date PAN becomes inoperative to the date it becomes operative, and higher TDS – tax deducted at source under the provisions of Section 206AA and TCS – tax collected at source under Section 206CC.
Besides, there will be a penalty if a taxpayer quotes an inoperative PAN in the income-tax return.
Who Are Exempted From Linking PAN And Aadhaar?
While linking Aadhaar and PAN is mandatory, there are a few exceptions. The rule to mandatorily link does not apply to a person:
· Not a citizen of India
· Non-resident Indians (NRIs)
· An individual aged more than 80 years at any time during the previous year
· When a person is residing in the states of Assam, Meghalaya, or Jammu and Kashmir
How To Link PAN-Aadhaar
Here is the step-by-step process:
Step 1: Visit the official e-filing website of the Income Tax Department
Step 2: Under the quick links, click the link ‘Link Aadhaar’
Step 3: A pop-up will open, showing “I agree to validate my Aadhaar details with UIDAI.” Click OK, and enter the ‘Captcha Code’. One can also ask for OTP instead of the CAPTCHA code. It will be sent to the mobile number registered with Aadhaar. Enter the OTP and click ‘Link Aadhaar.’
Step 4: Another pop-up window will open asking for PAN-related information, such as PAN card number, name, father’s name, date of birth, etc. Read the conditions mentioned and click ok. The linking will reflect on the Income Tax portal in around 4-7 working days.
One can check the linking status on the same portal by clicking ‘Link Aadhaar Status’, and entering the PAN and Aadhaar Number in the relevant boxes. Click ‘View Link Aadhaar Status’ on the bottom right corner after entering the PAN and Aadhaar number, and the status will be up on the screen.
As PAN is used in several financial documents, like opening a bank account, filing taxes, buying a mutual fund, etc., it is important that it remains active.
How To Reactivate PAN
If one’s PAN has already become inoperative, to activate the inoperative/inactive PAN, one needs to pay a non-refundable fee of Rs 1,000 through the same e-filing portal and then proceed with the linking.
