PAN-Aadhaar Linking Deadline Extended: What You Need to Know About the New CBDT Mandate

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PAN-Aadhaar Linking Deadline Extended: What You Need to Know

On April 3, 2025, the Central Board of Direct Taxes (CBDT) issued a crucial notification regarding the linking of PAN with Aadhaar. The government has mandated that all PAN holders who obtained their Permanent Account Number (PAN) using an Aadhaar enrollment ID must replace it with their original Aadhaar number by December 31, 2025.

This update comes in response to the growing need for accurate data linking between PAN and Aadhaar for tax-related purposes. Here’s a detailed breakdown of the new regulations and what they mean for you.

Key Points on the New PAN-Aadhaar Linking Deadline

1. Who is Affected?

The new deadline applies to PAN holders who received their PAN using an Aadhaar application enrollment ID before October 1, 2024. These individuals must now update their records by providing their original Aadhaar number to the Income Tax Department before the end of 2025.

2. Notification Details

According to the CBDT’s notification, which refers to Section 139AA of the Income-tax Act, 1961, individuals who have PAN linked via the Aadhaar application enrollment ID must notify the Income Tax Department of their Aadhaar number by December 31, 2025. The notification also makes clear that penalties related to the failure of linking PAN with Aadhaar before previous deadlines will not apply to this specific group of PAN holders.

How to Link Your Aadhaar with PAN

3. Linking Procedure

The procedure to link PAN with Aadhaar for those impacted by this deadline is expected to mirror the earlier PAN-Aadhaar linking process. You can link your PAN with Aadhaar through the Income Tax e-filing portal or by visiting a designated PAN Service Centre.

Steps to Link Online:

• Visit the official Income Tax e-filing portal.
• Log in and select the “Link Aadhaar” option.
• Enter your Aadhaar number and submit your details.

Offline Option: Alternatively, you can visit authorized PAN Service Centres like NSDL eGov or UTIITSL, where you’ll need to fill out the necessary forms and submit a copy of both your PAN and Aadhaar card. Biometric verification will be required if there’s a discrepancy in the data.

Avoiding Penalties: Who Is Exempt?

As per the new CBDT notification, those who were unable to link their PAN with Aadhaar before the June 30, 2023 deadline because they did not possess the original Aadhaar number will not face any penalties. This grace period has been specifically granted to individuals who received their PAN via an Aadhaar enrollment ID before October 1, 2024, and had no way of fulfilling the previous requirements.

Why PAN-Aadhaar Linking is Important

4. What is PAN?

A Permanent Account Number (PAN) is a unique 10-digit alphanumeric code issued by the Income Tax Department. It serves as a critical identifier for individuals and entities engaging in various financial and tax-related activities. The PAN helps in tracking tax payments, TDS/TCS credits, and filing income tax returns. It is also used for transactions like the sale or purchase of property, investments, and more.

5. PAN and Aadhaar Interchangeability

Since 2019, the Income Tax Act, 1961 allows Aadhaar to serve as a substitute for PAN in certain situations, such as high-value financial transactions. This ensures that those without a PAN can still comply with tax requirements by quoting their Aadhaar number.

Consequences of Non-Compliance

6. Inoperative PAN

If a PAN holder fails to link their PAN with Aadhaar by the specified deadline, the PAN may become inoperative. As a result, individuals with an inoperative PAN will face the following consequences:

• Higher tax deductions under Section 206AA.
• Tax collection at higher rates under Section 206CC.
• No refunds on tax overpayments.
• No interest on refunds.

7. Linking After Deadline

Individuals who missed the original PAN-Aadhaar linking deadline but link their PAN with Aadhaar after the deadline may still have their PAN reactivated within 30 days of submission, provided they pay the applicable fee under Section 234H.

Additional Guidelines and Legal Framework

8. PAN – Legal Requirements

The Income-tax Act, 1961, requires individuals to obtain and quote their PAN for various financial transactions. Some of the mandatory transactions include:

• Sale or purchase of property or vehicle.
• Opening of bank accounts or demat accounts.
• Transactions exceeding Rs. 50,000, such as payments for life insurance, mutual funds, and securities.

9. Importance of PAN for Tax Filing

PAN is crucial for tax filing and helps the Income Tax Department track an individual’s financial activities, such as income, tax payments, and any other tax obligations. Having an up-to-date PAN is essential for compliance and avoiding penalties.

Conclusion

The CBDT’s latest mandate requiring PAN holders to link their PAN with Aadhaar before December 31, 2025, brings important changes for those who received their PAN via the Aadhaar enrollment ID. By following the prescribed linking procedures, taxpayers can avoid penalties and ensure that their PAN remains active.

It’s essential for those affected by this deadline to act promptly and ensure compliance to avoid complications in the future.

PAN-Aadhaar Linking: Important Deadlines

If you have any questions regarding this process, it is advisable to consult with a tax professional or visit the official Income Tax e-filing portal for detailed guidance.

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