CBDT mandates PAN-Aadhaar linking for specific holders by 2025 end: Details

People who obtained their PAN using an Aadhaar enrolment ID rather than their actual Aadhaar number need to link cards before Dec 31, 2025

The Central Board of Direct Taxes (CBDT) has issued a new directive requiring certain Permanent Account Number (PAN) holders to link their PAN with Aadhaar by December 31, 2025. This applies specifically to individuals who obtained their PAN using an Aadhaar enrolment ID rather than their actual Aadhaar number.

 

What is PAN and Aadhaar?

PAN is a 10-digit alphanumeric ID issued by the Income Tax Department, essential for tax filing, financial transactions, and investments.

 

Aadhaar is a 12-digit identity number issued by the Unique Identification Authority of India (UIDAI), used widely as proof of identity and residence.

 

Who needs to update their records?

According to the notification, individuals who were allotted PAN based on their Aadhaar enrolment ID before October 1, 2024 must update their records by linking their PAN with their actual Aadhaar number. The directive was issued on April 3, 2025, under Section 139AA(2A) of the Income-tax Act, 1961.

 

How to Link PAN with Aadhaar?

The exact process for linking PAN and Aadhaar for these specific holders is yet to be clarified. However, tax experts anticipate that the procedure will likely involve updating Aadhaar details on the Income Tax Department’s e-filing portal, similar to the standard PAN-Aadhaar linking process.

 

What happens if you miss the deadline?

Though the notification does not explicitly mention penalties, the following consequences may apply if a PAN holder fails to update their Aadhaar number by December 31:

• PAN may become inoperative from January 1, 2026.
• Income Tax Returns (ITRs) filed with an inoperative PAN may be deemed invalid.
• Refunds linked to an inoperative PAN may not be processed.
• Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) may be deducted at higher rates.
• TDS/TCS credits may not appear in Form 26AS, affecting tax claims.
• Individuals may be unable to submit Form 15G/15H to avoid TDS deductions.
• Interest on tax refunds may not be granted if PAN is inoperative.

 

Why is this update required?

The government had earlier allowed individuals to obtain PAN using an Aadhaar enrolment ID instead of an actual Aadhaar number. However, the Union Budget 2025 announced the discontinuation of this provision from October 1,  2024. To ensure accuracy and prevent fraud in financial transactions, the CBDT is now requiring all such PAN holders to update their records.