PAN-Aadhaar linking: The complete truth about the December 31, 2025 deadline and the ₹1000 fee, know here..

Several misconceptions are spreading on social media regarding PAN and Aadhaar linking. People believe that linking is free until December 31, 2025. However, the truth is that a late fee has been applicable for most people since July 1, 2023. This fee is ₹1000. The December 31, 2025, deadline applies only to those who obtained their PAN using their Aadhaar enrollment ID before October 1, 2024. For them, linking is free until this date.

For others, their PAN has already become inoperative. Therefore, if you haven't linked, you won't receive tax refunds, higher TDS will be deducted, and you will face banking difficulties. The Income Tax Department has clearly stated that linking should be done on time. So, let's understand the new rules and what to do in simple terms.

What is the real deadline? Penalty already applies for most.

According to the Income Tax Department, the free deadline for PAN-Aadhaar linking was June 30, 2023. A late fee of ₹1000 has been applicable since July 1, 2023. The April 2025 notification provided relief to only one group: those who obtained their PAN using their Aadhaar enrollment ID before October 1, 2024. For them, linking is free until December 31, 2025. Others were required to link their PAN by paying ₹1000, and they can still do so, but the fee will apply.

Who is exempt from the ₹1000 fee?
Only one group is exempt: those whose PAN was created using their Aadhaar enrollment ID before October 1, 2024. These individuals can link for free until December 31. Other exemptions include: residents of Assam, Meghalaya, and Jammu and Kashmir, senior citizens above 80 years of age, and non-citizens. NRIs are also exempt in some cases, but everyone else will have to pay ₹1000.

What happens if you don't link?
After December 31, 2025, unlinked PANs will become inoperative.

You will not receive tax refunds. TDS/TCS will be deducted at a high rate of 20%.
You will not be able to open a new bank account or an FD.
Cash transactions exceeding ₹50,000 will not be possible.
Investment in mutual funds or shares will be stopped.
PAN is not cancelled permanently, but it will have to be reactivated later by paying ₹1000.

How to link: Step-by-step guide
Go to the e-Filing portal www.incometaxindia.gov.in.
Click on 'e-Pay Tax'.
Enter your PAN, verify with OTP.
Select Assessment Year 2025-26.
Select 'Other Receipts (500)' and make a payment of ₹1000 (those who are exempt do not need to pay).
After 4-5 days of payment, go to 'Link Aadhaar'.
Enter your PAN and Aadhaar number.
Match your name and date of birth.
Confirm with OTP.
If there is a difference in the name, correct your Aadhaar or PAN first.
Advice: Link soon, avoid penalties.

Please note that December 31st is the last chance for the exempted group; others should link earlier to save on fees.  Also, an inoperative PAN will cause problems. The Income Tax Department has advised linking on time. (Note: This news is based on general information; for more details, please consult a financial advisor.)

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