PAN-Aadhaar Link Deadline Nears: PAN Cards Will Become Inoperative if Not Linked With UIDAI Numbers Before December 31, Here’s How To Do It

New Delhi, December 20: From January 1, 2026, any PAN not linked with Aadhaar will be rendered inoperative, potentially disrupting tax filings, banking transactions, and investment activities. Citizens who miss the deadline may also face a ₹1,000 penalty to reactivate their PAN, making it essential to complete the linking process promptly through the e-filing portal or via SMS.

An inoperative PAN is one that is no longer functional for most tax and financial purposes. While it does not mean the PAN has been cancelled, it effectively renders it unusable until it is reactivated. The primary consequence is that taxpayers cannot file income tax returns, receive tax refunds, or complete transactions requiring a valid PAN. Aadhaar Update: How to Correct Your Name and Change Your Address Online Using UIDAI’s Revamped System.

Key Implications for Taxpayers

Individuals with an inoperative PAN will encounter several immediate challenges:

No Tax Refunds: Any pending income tax refunds will not be processed.

Higher TDS/TCS: Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) will be applied at a higher rate, as if the individual does not possess a PAN.

Inability to File ITR: Income Tax Returns cannot be filed using an inoperative PAN.

Restricted Financial Transactions: Many essential financial activities requiring PAN verification will be blocked.

Why the Linking is Mandatory

The government mandated PAN-Aadhaar linking primarily to curb tax evasion, identify duplicate PANs, and streamline the tax administration process. It serves as a crucial tool for the Income Tax Department to track financial transactions and ensure compliance across various platforms. The directive falls under Section 139AA of the Income Tax Act, 1961. Aadhaar Card Update 2025: UIDAI Rolls Out User-Friendly Changes for Children’s Mandatory Biometric Update, Check Step-by-Step Guide Here.

How to Check Your PAN-Aadhaar Link Status

Taxpayers can easily verify the linking status of their PAN and Aadhaar by visiting the official Income Tax e-filing portal. A dedicated "Link Aadhaar Status" section allows users to enter their PAN and Aadhaar number to instantly check the current status.

Reactivating an Inoperative PAN

For those whose PAN has become inoperative, the process for reactivation involves a penalty payment and subsequent linking. The steps are as follows:

1. Penalty Payment: A penalty of Rs 1,000 must be paid through the e-Pay Tax functionality on the Income Tax e-filing portal.

2. Aadhaar Linking Request: After successful payment, a request to link Aadhaar with PAN can be submitted on the same portal.

3. Processing Time: It typically takes approximately 30 days for the PAN to become operative again after the successful payment and submission of the linking request.

It is crucial to note that the PAN will remain inoperative until the linking process, including the penalty payment, is successfully completed and processed by the department.

Key Transactions Affected

Beyond tax filings, an inoperative PAN can hinder numerous financial activities, including:

Opening a new bank account.

Investing in mutual funds or stocks.

Applying for loans or credit cards.

Purchasing or selling immovable property.

Transactions exceeding certain thresholds, such as cash deposits or withdrawals above Rs 50,000.

Moving Forward

The Income Tax Department has consistently urged taxpayers to link their PAN with Aadhaar to avoid these inconveniences. Individuals with an inoperative PAN are advised to initiate the reactivation process without delay to ensure smooth financial operations and compliance with tax regulations. Timely action will prevent further disruptions and ensure access to all financial services requiring a valid PAN.

(The above story first appeared on LatestLY on Dec 20, 2025 01:20 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).