PAN at risk? Your PAN card may go inactive from Jan 1, 2026 - check this one detail before 31st Dec

The clock is ticking for taxpayers across India. The deadline to link the Permanent Account Number (PAN) with Aadhaar has been set for December 31, 2025, and the Income Tax Department has warned that failure to complete this linkage will render the PAN inoperative from January 1, 2026. This move is part of the government’s ongoing effort to streamline tax administration and curb duplication and tax evasion through multiple PANs.

According to a notification issued by the Central Government on April 3, 2025, every individual who was allotted a PAN using an Aadhaar Enrolment ID before October 1, 2024, must link their Aadhaar number with PAN before the deadline. Once Aadhaar is issued, linking becomes mandatory even if the PAN was initially generated through an enrolment ID.

Financial and compliance impact

An inoperative PAN will cause significant financial and administrative hurdles. Individuals will be unable to file or verify Income Tax Returns (ITRs), claim refunds, or process pending returns. Salary credits, mutual fund investments, and systematic investment plans (SIPs) may also be disrupted. Tax deducted at source (TDS) or tax collected at source (TCS) may be deducted at higher rates, and such credits will not appear in Form 26AS.

“Your PAN card will be deactivated from January 1, 2026. No ITR filing. No refunds. Even your salary credit or SIP could fail,” warned TaxBuddy, a tax advisory firm, in a social media post, underscoring the serious implications of missing the linkage deadline.

While the PAN can be reactivated after successful linkage—typically within 30 days—the interim period can lead to compliance gaps, financial delays, and disruptions in essential transactions.

What this means for taxpayers

The immediate impact of an inoperative PAN will primarily affect future financial transactions, not existing holdings. Existing assets and investments will remain valid, but unlinked PANs will restrict new investments, share trading, or KYC updates. In addition, unlinked PANs could trigger higher TDS deductions, impacting liquidity and creating inconvenience in day-to-day financial operations.

Tax professionals emphasize that PAN-Aadhaar linkage is not just a procedural formality but a critical compliance step for maintaining uninterrupted access to financial and tax-related services. Inoperative PANs could disrupt access to banking, digital payments, and other regulated transactions that require valid KYC records.

How to link PAN with Aadhaar

The linking process can be completed online through the Income Tax Department’s e-filing portal. Taxpayers must log in with their PAN and Aadhaar details, verify their registered mobile number, and complete the process using a one-time password (OTP). A fee of Rs 1,000 applies if the PAN has already become inactive. Once completed, users can check the status through the ‘Link Aadhaar Status’ option on the portal.

Who is exempt

Certain groups are exempt from this requirement — non-resident Indians (NRIs), individuals aged 80 years and above, and residents of specified states such as Assam, Meghalaya, and Jammu & Kashmir. For all other taxpayers, it is crucial to ensure that personal details such as name, date of birth, and mobile number match across PAN and Aadhaar records.

Last chance before deactivation

The Finance Ministry has already extended the deadline several times in the past, but no further extension has been announced. Tax experts urge individuals to complete the process well in advance to avoid portal congestion and technical issues closer to the deadline.

With the final date approaching, the message is clear — link your PAN with Aadhaar by December 31, 2025, or risk facing a financial freeze from January 1, 2026.