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Your Permanent Account Number (PAN) will become inoperative from January 1, 2026 if it is not linked to Aadhaar by December 31, 2025.
With the deadline drawing close, the implications are significant for taxpayers and anyone using PAN for routine financial transactions. The government has made PAN-Aadhaar linkage mandatory to improve tax compliance and reduce duplication in the system.
Who needs to link PAN with Aadhaar?
According to a notification issued by the Ministry of Finance on April 3, 2025, individuals who were allotted a PAN using an Aadhaar enrolment ID before October 1, 2024, must intimate their Aadhaar number to the Income Tax Department by December 31, 2025, or any later date notified by the Central Board of Direct Taxes (CBDT).
This means that even if your PAN was issued earlier based on an Aadhaar enrolment slip, you are required to complete the formal linking once the Aadhaar number is generated.
What happens if PAN becomes inoperative
An inoperative PAN can disrupt several financial and tax-related activities. If the linking is not completed by the deadline, taxpayers may face the following issues:
- Income tax returns cannot be filed or verified
- Pending refunds will not be processed
- TDS and TCS credits may not reflect correctly in Form 26AS
- TDS may be deducted at higher rates, as applicable to invalid PANs
- Opening new bank accounts, making fresh investments, or trading in securities may be restricted
Existing bank accounts will continue to operate, but most new financial transactions requiring PAN-based KYC may be blocked until the PAN is reactivated.
How to link PAN with Aadhaar?
The PAN-Aadhaar linking facility is available to individual taxpayers, whether or not they are registered on the income tax e-filing portal. The process is fully online and can be completed through the Income Tax Department’s official website.
Taxpayers need to enter their PAN, Aadhaar number, and a mobile number registered with Aadhaar, followed by OTP verification. If the PAN has already become inoperative, a penalty of Rs 1,000 has to be paid before completing the linking process.
Key points to remember
Before initiating the process, ensure that personal details such as name, date of birth, and gender match exactly on both PAN and Aadhaar records. An active mobile number is essential for OTP-based verification.
With a rush expected closer to the deadline, completing the PAN–Aadhaar linkage well in advance can help avoid technical glitches, penalties, and last-minute disruption to your finances.
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