Missed the PAN-Aadhaar Linking Deadline? Know the Fine and How to Link Now

The linking of the Permanent Account Number (PAN) with the Aadhaar card has become a crucial compliance requirement for all Indian taxpayers. Mandated by the Income Tax Department , this linkage ensures that individuals have a single identification number for both tax and identity purposes. It helps curb tax evasion, eliminates duplicate PANs, and simplifies financial verification across government services. However, failure to link the two within the specified deadline can lead to severe consequences, including monetary penalties and invalidation of the PAN card.

Importance of PAN-Aadhaar Linking

Linking your PAN with Aadhaar is not just a formality—it is essential for maintaining the validity of your PAN. It allows seamless processing of income tax returns (ITR), financial transactions, and government benefits. The government introduced this linkage to enhance transparency, track tax filings efficiently, and prevent individuals from possessing multiple PAN cards for fraudulent activities.

Legal Mandate and Governing Authority

The mandate to link PAN and Aadhaar comes under Section 139AA of the Income Tax Act, 1961, introduced by the Finance Act, 2017. As per this section, every individual with a PAN must link it with their Aadhaar number to keep their PAN active. The Central Board of Direct Taxes (CBDT) oversees the implementation of this process and periodically extends deadlines to give taxpayers sufficient time for compliance.

Current Deadline for PAN-Aadhaar Linking

The most recent deadline set by the CBDT for PAN-Aadhaar linking was June 30, 2023. Individuals who failed to complete the linking process before this date now face penalties and additional steps for reactivation. While the deadline has passed, taxpayers who haven’t linked their cards yet can still do so by paying a late fee.

Penalties for Non-Linking

If you missed the PAN-Aadhaar linking deadline , you are subject to the following penalties and consequences:

1. Monetary Fine

The Income Tax Department has prescribed a penalty of ₹1,000 for those who failed to link their PAN with Aadhaar before the due date. The linking process remains open after payment of this fine through the Income Tax e-filing portal.

2. PAN Becomes Inoperative

As per a CBDT notification effective from July 1, 2023, unlinked PAN cards are declared inoperative. This means that while the PAN still exists in records, it cannot be used for any financial or legal purpose until reactivated by completing the linking process.

3. Consequences of Inoperative PAN

When a PAN becomes inoperative, it affects several financial and compliance-related activities:

• Inability to file income tax returns

Invalid PAN-based financial transactions (such as bank account operations, mutual fund investments, or securities trading)

Difficulty in opening new bank accounts or applying for loans and credit cards

TDS (Tax Deducted at Source) deductions at a higher rate (20%)

Delay in receiving tax refunds

How to Check PAN-Aadhaar Linking Status

Before initiating the linking process, it’s advisable to check the status online:

1. Visit the official Income Tax e-filing portal (www.incometax.gov.in).
   
   
2. Click on “Link Aadhaar Status” under the Quick Links section.
   
   
3. Enter your PAN and Aadhaar numbers.
   
   
4. The system will display whether your PAN and Aadhaar are already linked, pending, or not linked.
   
   

How to Link PAN with Aadhaar

Taxpayers can link their PAN and Aadhaar in two ways — online through the e-filing portal or via SMS.

Online Linking Process

1. Visit the Income Tax e-filing website.
   
   
2. Click on “Link Aadhaar” under Quick Links.
   
   
3. Enter your PAN, Aadhaar number, name as per Aadhaar, and mobile number.
   
   
4. Pay the prescribed late fee (₹1,000) via the e-Pay Tax option.
   
   
5. Submit the request after payment confirmation.

Linking Through SMS

Send an SMS to 567678 or 56161 in the following format:
UIDPAN <12-digit Aadhaar> <10-digit PAN>
Example: UIDPAN 123456789012 ABCDE1234F

Exemptions from PAN-Aadhaar Linking

Certain individuals are exempted from linking PAN with Aadhaar, including:

• Residents of Assam, Jammu & Kashmir, and Meghalaya
  
  
• Non-Resident Indians (NRIs) as per the Income Tax Act
  
  
• Individuals aged 80 years or above

Foreign nationals holding PAN

Steps to Reactivate Inoperative PAN

If your PAN has become inoperative, you can reactivate it by completing the linking process along with the penalty payment. Once the payment and linking are verified, your PAN will automatically become active within a few days.

Conclusion

The PAN-Aadhaar linking requirement is a crucial step towards building a transparent and efficient tax system in India. While the government has provided opportunities for late linking, failing to comply can cause financial disruptions and legal complications. To avoid inconvenience, ensure that your PAN and Aadhaar are linked through the official channels as soon as possible. A few minutes of compliance can save you from unnecessary penalties and service interruptions in the future.