Aadhaar-PAN Linking: If you have a PAN card, this information could be extremely important for you. The Income Tax Department has made it clear that those who have not yet linked their PAN card with their Aadhaar card have very little time left. Failure to link within the stipulated time frame may render the PAN card inactive, which could disrupt many essential daily financial activities.

The government has made linking PAN and Aadhaar mandatory to make the tax system transparent and secure, thereby preventing identity fraud and tax evasion. This is why strict action is now expected against those who are still delaying this process despite repeated warnings.

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What will happen if PAN and Aadhaar are not linked?

According to the Income Tax Department, taxpayers who have not yet linked their Aadhaar with PAN will have to pay a late fee of Rs. 1,000 before linking. This fee is non-refundable. However, those whose PAN was generated after October 1, 2024, through an Aadhaar enrollment ID, have been given an exemption to complete this process without any fee until December 31, 2025.

What will happen after December 31, 2025?

If the PAN-Aadhaar linking is not done by the deadline, the PAN card may become inoperative from January 1, 2026. This means that you will not be able to file Income Tax Returns, tax refunds may be withheld, and several financial services may be suspended.

In addition, there may be problems with banking, mutual funds, the stock market, and other investment-related services. Higher TDS or TCS may be deducted, and documents like Form 15G or 15H may become invalid.

Why is linking PAN to Aadhaar necessary?

PAN-Aadhaar linking strengthens the identity verification of taxpayers. This ensures that an individual has only one PAN and all financial transactions are recorded correctly. Transactions made with an unlinked PAN may be considered suspicious by the system.

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How to link PAN and Aadhaar online

The Income Tax Department has provided an online facility to link PAN with Aadhaar, which anyone can complete from the comfort of their home. Simply visit the e-filing portal and enter your PAN and Aadhaar number through the ‘Link Aadhaar’ option. An OTP will be sent to the mobile number linked with your Aadhaar, and after verification, the linking process will be complete. If a late fee is applicable, it will have to be paid through e-pay tax. The status is updated within a few days after successful submission.

Problems if PAN and Aadhaar are not linked

If your PAN becomes inactive, not only will tax-related work be halted, but investment and banking services will also be affected. Existing Forms 15G and 15H may also become invalid, which could result in higher tax deductions on your interest income.