PAN-Aadhaar Linking Free Until 31 December 2025: Complete Guide on Eligibility, Step-by-Step Process, Benefits, and Deadline Details

In April 2025, the Indian tax authorities (CBDT) issued a relief to a specific class of PAN holders: those whose PAN was allotted based on an Aadhaar enrolment ID (rather than a full Aadhaar number) submitted before 1 October 2024. These persons are now allowed to link their PAN with myAadhaar free of any late fee, provided they complete the linkage by 31 December 2025.

Here is a detailed, step-by-step breakdown of what this means, who qualifies, what happens if you miss the deadline, and exactly how to do the linkage (both with and without paying a fee, where applicable).

1. Background & Legal Basis

1.1 PAN, Aadhaar & the Linkage Requirement

• The Permanent Account Number (PAN) is a 10-character alphanumeric identifier issued by the Income Tax Department. It is used for tax filings, financial transactions, and for linking identity across financial instruments.
• Aadhaar is a 12-digit unique identity number issued by UIDAI (Unique Identification Authority of India), based on demographic and biometric data.
• Under Section 139AA of the Income-tax Act, every person who has been allotted PAN and is eligible for Aadhaar must “intimate” their Aadhaar number in the prescribed manner. (Earlier deadlines had been fixed, e.g. June 30, 2023.)

1.2 Earlier Deadlines & Extensions

Originally, the deadline to link PAN with Aadhaar was June 30, 2023. After that, the tax department allowed linking by paying a late fee of ₹1,000. But that relief was not uniformly extended to all PAN holders.

What is new is the April 3, 2025 Notification No. 26/2025 issued by the CBDT under Section 139AA(2A). This notification declares that those persons whose PAN was allotted on the basis of an Aadhaar enrolment ID filed before 1 October 2024 must intimate their Aadhaar number to the authorities by 31 December 2025.

This relief means that such taxpayers can link their PAN and Aadhaar without paying the late fee, as long as they do so by the new deadline.

Thus, the “free until December 31, 2025” offer does not apply to all PAN holders — only to that specified group.

2. Who Qualifies for Free PAN-Aadhaar Linking Until 31 December 2025?

Not everyone gets this waiver. Here is exactly who is eligible, and who is not.

2.1 Eligible Persons (Free Linking)

You qualify for free PAN–Aadhaar linking (no ₹1,000 late fee) if all of the following are true:

1. Your PAN was allotted on the basis of Aadhaar Enrolment ID (i.e., when applying for PAN, you had given just the enrolment ID of your Aadhaar application, not the full Aadhaar number).
2. The Aadhaar Enrolment ID was submitted before 1 October 2024.
3. You complete the linkage by 31 December 2025 (or such later date as CBDT may notify).

If all these conditions are met, you are exempted from the ₹1,000 late linking fee.

2.2 Who Is Not Eligible for Free Linking

• Persons whose PAN was allotted using the full Aadhaar number (not just the enrolment ID) are not eligible for this waiver. They would need to pay the ₹1,000 fee if they missed earlier deadlines.
• Individuals whose Aadhaar Enrolment ID was submitted on or after 1 October 2024 are also not eligible for free linking.
• People who did not manage to link by earlier deadlines and whose PAN was not in the above category may have to pay the ₹1,000 fee.

So, in short: this waiver is only for a narrow group of taxpayers meeting those criteria.

3. What Happens If You Fail to Link by 31 December 2025?

If you don’t complete the linkage by the deadline, the consequences for eligible and non-eligible persons differ somewhat, but many adverse effects will apply.

3.1 PAN Becomes “Inoperative”

From 1 January 2026, for the eligible class (those who got PAN via Aadhaar enrolment ID before October 1, 2024) who did not link, their PAN will be considered inoperative.

An inoperative PAN cannot be used in many financial and tax activities.

3.2 Impact on Tax Filing, Refunds & TDS/TCS

• You may be unable to file Income Tax Returns (ITR) using an inoperative PAN.
• Pending or future tax refunds will not be processed for an inoperative PAN.
• Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) will be deducted/collected at higher rates under Sections 206AA / 206CC, given that PAN is non-operative.
• The credit of TDS/TCS may not be reflected in Form 26AS, which could lead to issues in claiming such credits later.

3.3 Restrictions on Financial Transactions & Services

With an inoperative PAN:

• You may not be able to open a bank account or carry out PAN-based financial transactions.
• You may be prohibited from investing in mutual funds or securities that require PAN.
• High-value transactions requiring PAN may fail or be blocked.
• Issuance of debit/credit cards, participation in financial schemes, etc., may also be adversely impacted.

3.4 Reactivation & Late Fee

If your PAN becomes inoperative due to failure to link, you can revive (reactivate) it by:

1. Paying the ₹1,000 late linking fee.
2. Submitting the PAN–Aadhaar linkage request (or Aadhaar intimation) thereafter.

After payment and linkage, the PAN is expected to become operative again (usually within 30 days).

Thus, it is strongly advised to perform the linkage before the deadline to avoid all these hassles and lose no benefits.

4. How to Link PAN & Aadhaar (Free or With Payment)

Below is a comprehensive, step-by-step user manual for linking PAN and Aadhaar via the Income Tax Department’s e-Filing portal (or via SMS, where applicable).

4.1 Methods of Linking

There are two main modes:

• Pre-login (without logging into the portal)
• Post-login (after logging in to e-Filing)

Additionally, in certain cases, SMS-based linking may be possible (depending on region and guidelines).

4.2 Detailed Steps via e-Filing Portal

(A) Linking in Pre-login Mode

1. Go to the Income Tax e-Filing portal: https://www.incometax.gov.in

2. On the homepage, under “Quick Links”, click “Link PAN Aadhaar”.

3. Enter your PAN, Aadhaar number, your name as per Aadhaar, etc. Click “Continue”.

4. You will be prompted to validate via OTP on the mobile number registered with Aadhaar. Enter that OTP.

5. If your PAN–Aadhaar combination is eligible for free linking and no payment is needed, the link request will be submitted.

   • If payment is required, you will see a “payment details not found” pop-up. Click “Continue to Pay Through e-Pay Tax”.

6. After OTP and/or payment (if required), your linking request is submitted. You can check status under “Link Aadhaar Status” (pre-login) by entering PAN and Aadhaar.

(B) Linking in Post-login Mode (Logged into e-Filing)

1. Log into the e-Filing portal using your PAN, password, and other credentials.
2. Navigate to Profile → Link Aadhaar (or sometimes “My Profile — Aadhaar Link”)
3. Enter your Aadhaar number and validate.If no payment is needed, simply submit the linking request. Otherwise, follow prompts to pay.
4. Check the “Link Aadhaar Status” via your dashboard. If linkage is successful, the portal will display your Aadhaar number.

(C) Payment of ₹1,000 Fee (When Applicable)

If you are not eligible for free linking, or you missed earlier deadlines, this is how you pay:

1. While linking, when prompted, go to e-Pay Tax option.

2. Under the Income Tax tab, choose:

   • Assessment Year (e.g. AY 2025-26)

   • Major Head / Type of Payment: “Other Receipts (500)”

   • Sub-type: “Fee for delay in linking PAN with Aadhaar”

3. The amount (₹1,000) will be prefilled (if applicable). Confirm and proceed.

4. Choose mode of payment (Net Banking, Debit Card, NEFT/RTGS, etc.).

5. After payment is confirmed, return to the linking screen to submit the PAN–Aadhaar linkage request.

Once your payment is verified, the request goes through, and your PAN will be linked (or reactivated) in due course (usually a few days).

4.3 SMS-Based Linking (If Available)

In some earlier years, the government allowed linking via SMS in certain situations. But as of 2025, the preferred and supported route is via the e-Filing portal. Users are advised to check the Income Tax website / notices to see if any SMS facility is allowed in their region. (The main user manual and FAQs focus on the portal methods.)

4.4 Checking Link Status & Troubleshooting

• On the e-Filing portal, via “Link Aadhaar Status”, one can check whether the linking is Successful, Pending, or Failed.
• If the request is pending with UIDAI, you may have to wait and retry later.
• In case of errors like “PAN already linked to another Aadhaar” or “Aadhaar linked to another PAN,” you may need to contact your jurisdictional Assessing Officer (AO) to delink and correct the issue.

5. Why Does This Free Linking Window Matter?

1. Cost savings – For qualified PAN holders, this is a one-time opportunity to link without paying the ₹1,000 late fee.
2. Avoidance of disruption – Linking before the deadline avoids PAN becoming inoperative and prevents downstream issues in tax filings, refunds, and financial operations.
3. Legal compliance – This move ensures alignment with the Income Tax Act’s provisions and CBDT’s notifications.
4. Clarity to taxpayers – Earlier ambiguity about fee waivers is resolved. Taxpayers who got PAN via Aadhaar enrolment ID now have a defined window.

In sum, if you fall in the eligible class, you should not delay — linking now (in 2025) will save cost, hassle, and future complications.

Suggested Timeline & Best Practices

1. Check whether you qualify: Verify how your PAN was allotted (via enrolment ID or full Aadhaar) and the date of Aadhaar enrolment.
2. Link early: Don’t wait till December 2025. Linking in mid-2025 gives margin for any technical issues or delays.
3. Ensure matching details: Make sure your name, date of birth, and other details in Aadhaar and PAN align. If not, first get Aadhaar corrections via UIDAI.
4. Use the official portal: Always link via the e-Filing portal; avoid unauthorized intermediaries.
5. Keep evidence: After linking, save the acknowledgement or screenshot, so you have proof of compliance.
6. Monitor status: Check “Link Aadhaar Status” occasionally to see if there is any pending or failed request.
7. Act if failed: If your linking fails, figure out the error (e.g. mismatch, delinking needed) and resolve it timely.

Conclusion: Don’t Miss the Window

The “free until 31 December 2025” extension is a welcome concession—but it applies only to a specific class of PAN holders. If your PAN was allotted based on an Aadhaar enrolment ID submitted before 1 October 2024, you can now link your PAN with Aadhaar without paying any late fee, as long as you complete it by the deadline. Miss that window, and your PAN will become inoperative, triggering cascading problems in tax filings, refunds, and financial dealings.

If you are unsure about eligibility or need help with the actual linkage, feel free to ask — I can guide you step by step. Do you want me to prepare a “checklist” or a short step-by-step cheat sheet you can follow easily?

Frequently Asked Questions (FAQs)

Q1. I got my PAN before 1 October 2024, but I used my full Aadhaar number (not enrolment ID) in PAN application. Do I qualify?

A1. No. The waiver is specifically for those whose PAN was based on an Aadhaar enrolment ID. If you provided the full Aadhaar number, you will need to link (if not already done) by paying the ₹1,000 fee.

Q2. What if I don’t link by 31 December 2025?

A2. Your PAN will become inoperative from 1 January 2026 (for the eligible class). You will lose the ability to file ITRs, claim refunds, do many financial transactions, and more — unless you pay the ₹1,000 fee later and link.

Q3. Is there any risk or drawback to linking early?

A3. None. It is beneficial to link early to avoid confusion, errors, or last-minute rush. As long as your details (name, date of birth) in PAN and Aadhaar match, it should proceed smoothly.

Q4. How long does it take for linkage to reflect?

A4. Typically, once your request is validated and (if needed) payment is cleared, the linkage is reflected in a few days. If pending or delayed, check back in “Link Aadhaar Status.”

Q5. Will my physical PAN card change?

A5. No. Linking does not change your PAN or physical card. It just ensures your PAN is operable, legally linked, and valid for all tax uses.

Q6. From July 1, 2025, is Aadhaar mandatory for new PAN applications?

A6. Yes. The government has indicated that any new PAN application from 1 July 2025 will require Aadhaar authentication as part of the issuance process.