Refunds for 1.3 Lakh People Stuck Due to Unlinked PAN-Aadhaar, Can You Link Them Now? How Much Is the Fee?

If you, too, are eagerly awaiting your income tax refund and the money has not yet credited to your account, the reason may not be a technical glitch, but rather your 'inoperative' PAN. The government recently informed Parliament that crores of rupees belonging to lakhs of taxpayers across the country have been left in limbo due to a single, minor oversight. Minister of State for Finance Pankaj Chaudhary stated that refunds for 130,638 taxpayers have been withheld because their PAN cards were not linked to their Aadhaar cards. The total value of these pending refunds amounts to ₹340.30 crore.

These taxpayers had filed their Income Tax Returns (ITRs) on time; however, their PAN cards had become inactive because they were not linked to their Aadhaar cards. Until a PAN card is reactivated, the department cannot issue the corresponding refund. According to data from the Ministry of Finance, as of January 1, 2026, 92,550,668 individual PANs across the country had become inoperative. The deadline for linking a PAN card with Aadhaar—free of cost—was December 31, 2025.

**Can PAN still be linked to Aadhaar?**

If your name appears on the list of individuals whose refunds have been stalled due to the lack of a PAN-Aadhaar link, there is no need to panic. You can still link your PAN with Aadhaar and restore its active status. However, you will now be required to pay a penalty to do so. So far, the government has collected a total of ₹2,338.31 crore in late fees from those who have linked their cards belatedly. This indicates that people are now completing this process by paying the applicable penalty.

**How ​​to link PAN with Aadhaar?**

Following the expiration of the December 31, 2025 deadline, it is now mandatory to pay a late fee (penalty) of ₹1,000 to link a PAN card with Aadhaar. The step-by-step procedure for linking is outlined below:
**Visit the Portal:** First, log in to the official Income Tax website: incometax.gov.in. Select 'Link Aadhaar': Click on 'Link Aadhaar' within the 'Quick Links' section on the homepage.
Enter Details: Enter your PAN and Aadhaar number.

Pay Penalty: Pay the late fee of ₹1,000 using the 'e-Pay Tax' facility.
OTP Verification: Complete the process by entering the OTP received on the mobile number linked to your Aadhaar.

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