Aadhaar-PAN Card- Big news for Aadhaar and PAN Card holders. The Central Board of Direct Taxes plans to make Aadhaar authentication compulsory for a new Permanent Account Number (PAN) card from July 1. Thats what officials said.

A senior official said that, “The move for Aadhaar-based verification aligns with the digitalisation drive and efforts to ensure accountability and compliance in tax filing.” The Government of India has extended the deadline several times for linking PAN card and Aadhaar card, but now a new deadline has come up. If you have not yet linked your PAN with Aadhaar or have got PAN made using Aadhaar enrollment ID, then this news is very important for you. The government has made it clear that if the deadline is missed this time, then many restrictions can be imposed on your PAN card. Let us understand this issue in simple language and know what problems can arise in case of missing the deadline, as well as the way to fix it.

The Central Board of Direct Taxes (CBDT) issued a notification on April 3, 2025, stating that those who had got their PAN card made through Aadhaar enrolment ID, will have to link their PAN with the actual Aadhaar number by December 31, 2025. This rule applies specifically to those who applied for Aadhaar before October 1, 2024 and got PAN using the enrolment ID at that time. The CBDT has directed under section 139AA of the Income Tax Act, 1961 that such PAN holders will have to update their Aadhaar number in the system of the Income Tax Department.

Moreover, Aadhaar-PAN linking is already mandatory even for normal PAN holders. The original deadline for linking was March 31, 2022, which was later extended to June 30, 2023. Since then, non-linked PAN cards had become inactive.

If you do not link your PAN to Aadhaar, then many problems can arise. The first and biggest problem is that your PAN card will become inoperative. This means that you will not be able to use your PAN card in any financial transaction. Non-linked PAN cards have become inactive from July 1, 2023. This can affect your daily life in this way:

First, you will not be able to file your Income Tax Return (ITR). Under Section 139AA of the Income Tax Act, Aadhaar-PAN linking is mandatory for every taxpayer. If your PAN is inactive, your return will not be accepted. Second, if you are due any tax refund, you will not get it. Also, the interest on the refund will not be given to you.

Thirdly, if your PAN is inactive, Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) on your transactions will be deducted at twice the normal rate. For example, if the normal TDS is 10%, it may be 20% in case of an inactive PAN.

Apart from this, if you make a big transaction in the bank, such as investing in mutual funds, taking a loan, or buying property, then these transactions may stop due to inactive PAN. The government has taken this step to prevent financial fraud, as many fintech companies were using PAN without the consent of the user.