PAN-Aadhaar Linking 2026: Inoperative PAN, Rs. 1,000 Fee & Reactivation

What changed

Notification 26/2025 dated 3 April 2025 required individuals who were allotted a PAN using an Aadhaar enrolment ID before 1 October 2024 to complete the PAN-Aadhaar linkage using their actual Aadhaar number on or before 31 December 2025. Failing this, the PAN became inoperative with effect from 1 January 2026. Late linking remains possible with a fee.

Consequences of an inoperative PAN

• Cannot file income tax returns
• Refunds get withheld, with no interest for the period
• TDS/TCS deducted at a higher 20% rate under Section 206AA
• High-value financial transactions may face rejection or extra paperwork
• Remains inoperative until the linkage is completed and the PAN is reactivated

How to link late (fee and process)

• Log in to the income tax e-filing portal
• Pay Rs. 1,000 under e-Pay Tax: Minor Head 500 (Other Receipts)
• Wait 2-4 working days for the payment to credit, then submit the Link Aadhaar request
• PAN becomes operative after UIDAI validates the name, DOB and Aadhaar details

Impact on taxpayers

Most taxpayers linked years ago and are unaffected. The affected group is people who received a PAN via an Aadhaar EID and never updated it - they must pay the fee and complete the linkage before filing ITR for AY 2026-27, since an inoperative PAN blocks e-filing.

What you should do

• Check PAN-Aadhaar status on the income tax portal
• If inoperative, complete late linking with the Rs. 1,000 fee before filing your return
• Match your PAN details (name, DOB) with Aadhaar to avoid rejection
• Keep the e-filing acknowledgment with the paid challan for your records