Alert: Your PAN Card Could Become Inactive If You Don’t Complete This Aadhaar Linking by December 31, 2025
Alert: Your PAN Card Could Become Inactive If You Don’t Complete This Aadhaar Linking by December 31, 2025
CBDT makes it mandatory for PAN holders who used Aadhaar enrolment IDs to update their actual Aadhaar number or risk penalties and financial setbacks.
The government has issued a crucial reminder for taxpayers: if your Permanent Account Number (PAN) was issued using an Aadhaar enrolment ID instead of your actual Aadhaar number, you must link your PAN with your Aadhaar by December 31, 2025. The directive, announced by the Central Board of Direct Taxes (CBDT), applies to all individuals who received their PAN before October 1, 2024 using an enrolment ID.
After October 1, 2024, applicants will no longer be able to use an enrolment ID to obtain a PAN card. Only those with an active Aadhaar number will be eligible to apply.
This change stems from Section 139AA of the Income Tax Act, 1961, which made it mandatory to quote Aadhaar while applying for PAN or filing income tax returns. A temporary exception allowed individuals awaiting Aadhaar to use their enrolment ID, but that provision ends under the Finance Act, 2024.
If you fail to update your Aadhaar by December 31, 2025, your PAN will become inoperative, which can trigger several financial consequences:
- You will not receive income tax refunds.
- If a refund is processed later, no interest will be paid for the period when your PAN was inactive.
- TDS (Tax Deducted at Source) will be applied at a higher rate, as per Section 206AA.
- Your income tax return could be treated as defective or even “not filed,” resulting in penalties and the loss of benefits such as the carry-forward of business losses.
Tax experts caution that an inactive PAN can cause major disruptions. Even though you can still link Aadhaar after the deadline by paying a Rs 1,000 penalty under Section 234H, the tax disadvantages during the inactive period, such as lost interest and higher TDS will not be reversed.
To avoid complications, complete the Aadhaar linking well before the deadline. The process is simple and entirely online:
- Visit the official Income Tax e-filing portal: https://www.incometax.gov.in
- Under the “Quick Links” section, click on ‘Link Aadhaar’
- Enter your PAN, Aadhaar number, and name as per Aadhaar
- Verify using the OTP sent to your registered mobile number
- Submit your request
This facility is already active and will remain available for taxpayers covered under the new rule.
The government’s directive is not merely administrative, it carries real financial implications. Missing the Aadhaar linking deadline can mean delayed refunds, higher tax deductions, and avoidable penalties. To ensure uninterrupted tax compliance, it’s best to act now rather than wait until year-end.
