The government has made it compulsory to link your PAN card with Aadhaar starting July 1, 2025.
If you do not complete this linking by December 31, 2025, your PAN card will become inoperative.
An inoperative PAN affects important financial activities, meaning you will not be able to file income tax returns, receive tax refunds, or carry out several financial transactions.
What Is an Inoperative PAN?
An inoperative PAN still works as an identity proof, but it loses its financial validity.
This means you cannot file ITRs, claim tax refunds, or complete other tax-related processes.
Many financial transactions also get affected, such as:
Opening a bank account
Updating KYC
Investing in mutual funds
Updating or applying for credit cards
Increased TDS and Refund Problems
If your PAN becomes inoperative, the TDS (Tax Deducted at Source) on your income will be charged at a higher rate. You will also be unable to receive any tax refunds until your PAN is reactivated.
How to Activate Your PAN Card
To reactivate your PAN, you must link your Aadhaar with your PAN through the Income Tax portal. A late linking penalty of ₹1,000 has to be paid.
Once the linking is completed successfully, your PAN card will be activated within a few days.
What to Do After Activation
After your PAN becomes active again, you must update your KYC details across all financial accounts and investment platforms. Make sure your PAN information is updated in your:
Bank account
Demat account
Mutual fund investments
Insurance policies
Loan accounts
