Updated 1 January 2026 at 12:28 IST

Missed PAN-Aadhaar Link Deadline? Here's What Changes From January 1, 2026

PANs not linked with Aadhaar by December 31, 2025, become inoperative from January 1, 2026. An inoperative PAN cannot be used for filing tax returns, claiming refunds, or completing many financial transactions. Late linking is permitted with a ₹1,000 penalty, after which PAN status can be restored.

Republic Business
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PAN and Aadhaar card linking consequences from January 1, 2026

From January 1, PANs that are not linked with Aadhaar will be marked inoperative. | Image: Republic

Individuals who failed to link their Permanent Account Number (PAN) with Aadhaar by the December 31, 2025 deadline will face operational restrictions from January 1, 2026, as per Income Tax Department rules.

PAN Becomes Inoperative

From January 1, PANs that are not linked with Aadhaar will be marked inoperative. An inoperative PAN is not considered valid for tax or financial use until the linkage is completed.

This applies to taxpayers who are required to link PAN with Aadhaar under existing income tax provisions.

Financial and Tax Activities Impacted

Once a PAN becomes inoperative, individuals may face difficulties in carrying out routine financial and tax-related activities. These include:

Filing income tax returns
Receiving income tax refunds
Completing KYC for banks, mutual funds, and brokers
Opening new bank or investment accounts
Carrying out certain high-value financial transactions

Entities that require PAN for compliance purposes may reject transactions if the PAN is inactive.

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Higher Tax Deduction Risk

In cases where PAN is not operative, tax deducted or collected at source (TDS/TCS) may be charged at higher rates, as applicable under income tax rules for transactions without a valid PAN.

This could impact salary payments, interest income, and other taxable receipts.

Late Linking Still Allowed with Penalty

Taxpayers who missed the deadline can still link PAN with Aadhaar after December 31 by paying a late fee of ₹1,000. Once the linkage is completed and the penalty paid, the PAN can be restored to operative status.

The process can be completed through the Income Tax Department’s online portal.

Who is Exempt?

Certain categories of individuals, such as non-residents, very senior citizens above the prescribed age, and those specifically exempted by the government, are not required to link PAN with Aadhaar.

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Published By : Shourya Jha

Published On: 1 January 2026 at 12:28 IST