📌 Overview

The Central Board of Direct Taxes (CBDT) has taken decisive action against Permanent Account Numbers (PANs) not linked with Aadhaar by the extended deadline. Thousands of PANs have now been rendered inoperative, triggering penalties and disruptions for affected taxpayers.

This article explains:

🔹 What happens if your PAN is not linked
🔹 Penalties you may face
🔹 How to check & rectify the issue
🔹 FAQs and CBDT clarifications

📣 Latest CBDT Notification Highlights

✅ Final Deadline to Link PAN with Aadhaar: June 30, 2025
✅ Penalty for Non-Compliance: ₹1,000
✅ Consequences: PAN becomes inoperative effective July 1, 2025

📊 Impact Snapshot

⚠️ Who is Affected?

🔸 All Indian Residents with a PAN issued before July 1, 2017
🔸 Includes salaried individuals, business owners, freelancers, investors
🔸 NRIs & Foreign Citizens exempt (with proof)

🚫 What Does "Inoperative PAN" Mean?

An inoperative PAN is as good as not having a PAN for legal and tax purposes.

🔻 Key Consequences:

💡 How to Check PAN-Aadhaar Linking Status?

1. Go to the Income Tax e-filing portal

2. Click on ‘Link Aadhaar’

3. Enter your PAN and Aadhaar Number

4. Check linking status

✅ If already linked: You're safe.
❌ If not linked: Follow linking procedure + pay ₹1,000 penalty.

🧾 Step-by-Step: Link PAN with Aadhaar (Post Deadline)

🔍 What if Your PAN is Already Inoperative?

CBDT permits reactivation by completing the linking process even after July 1st.

“Such PANs shall become operative again within 30 days from the date of Aadhaar linking.” – CBDT Circular No. 7/2025

🎯 Why Did CBDT Enforce This Rule?

The government aims to:

• ☑️ Eliminate duplicate/fraudulent PANs

• ☑️ Boost taxpayer accountability

• ☑️ Curb tax evasion & identity theft

• ☑️ Streamline compliance through Aadhaar authentication

💸 Penalties and Fines

🏦 Impact on Financial Transactions

🚫 Not Allowed / Impacted with Inoperative PAN:

🔹 Q1: My PAN is inoperative. Can I file ITR now?

❌ No, you must first link PAN with Aadhaar, pay the penalty, and wait for PAN to become operative again.

🔹 Q2: I am an NRI. Do I need to link?

✅ Exempted — if you have proof of NRI status (e.g., passport with overseas address).

🔹 Q3: What if Aadhaar has mismatched details?

You must:

1. Update Aadhaar at UIDAI

2. Wait 2–5 days for correction

3. Retry linking on income tax site

🗂️ Sample Case Study

👤 Mr. Rajat Kumar (Delhi)

• Forgot to link PAN before the June 30 deadline

• Filed ITR on July 5, 2025 – ITR not processed

• PAN marked inoperative

• Deduction of ₹12,000 as TDS on FD interest at 20% instead of 10%

🔄 He paid ₹1,000 penalty, linked Aadhaar, and PAN became operative on July 25, 2025.

📅 Important Dates

📝 Checklist for Compliance ✅

✔️ PAN & Aadhaar Numbers handy
✔️ Check if Aadhaar is updated
✔️ Pay penalty via TIN NSDL or e-Pay Tax
✔️ Complete linking on income tax portal
✔️ Take a screenshot of the confirmation
✔️ Recheck status after 5–7 days

📢 Final Reminder from CBDT 🚨

“Taxpayers must ensure that their PAN and Aadhaar are linked immediately to avoid inconvenience in tax compliance and financial operations.”