If you’ve taken the process of linking your PAN and Aadhaar lightly, be careful now. The Income Tax Department of the Government of India has clarified that the December 31, 2025, deadline is the last chance for those who obtained a PAN using their Aadhaar enrollment ID. If the linking process isn’t completed by this date, your PAN card will become “inoperative” from January 1, 2026.
This will directly impact your Income Tax Return (ITR), banking services, stock market investments, and mutual funds. In this article, we’ll explore in detail what you need to do under the new rules and the difficulties you may face if the linking isn’t completed.
December 2025 Deadline
The Central Board of Direct Taxes (CBDT) recently issued a new circular. Accordingly, taxpayers who used their Enrollment ID instead of their Aadhaar number when applying for a PAN card are now required to link their original Aadhaar number with their PAN.
Under Section 139AA of the Income Tax Act, every Indian citizen who was allotted a PAN before July 1, 2017, is required to link their PAN with Aadhaar. The government aims to eliminate fake PAN cards and curb tax evasion. If you ignore this rule, your PAN card will become just a piece of plastic.
5 Major Disadvantages of an Inoperative PAN
If your PAN card becomes inoperative, it will deal a severe blow to your financial life. Some of the serious consequences are listed below:
You will not be able to file your income tax return, and any tax refunds that are pending will not be received until your PAN is reactivated.
As a rule, if your PAN card is not active, your TDS and TCS will be deducted at a much higher rate (often up to 20%) than normal.
Bank account, fixed deposit (FD), and loan transactions may be halted as KYC will be considered incomplete.
You will not be able to invest in mutual funds, the stock market, or any major schemes.
These forms submitted to save tax will not be accepted.
Online method to link PAN and Aadhaar
Linking PAN and Aadhaar is not rocket science. You can complete this task from the comfort of your home in 5 minutes:
First, log in to the e-filing portal.
Click on ‘Link Aadhaar’ in the ‘Quick Links’ section on the home page.
Enter your PAN and Aadhaar numbers.
An OTP will be sent to your Aadhaar-linked mobile number; submit it.
If your case is old, pay ₹1,000 through ‘e-Pay Tax’.
What to do if your PAN has already been deactivated
If your PAN card has been deactivated, you can still get it reactivated by paying a penalty of ₹1,000. However, keep in mind that it takes approximately 30 days for the PAN card to become operational again after submitting the linking request. You should avoid making any major financial transactions during this time.