Deadline Alert: PAN Deactivation Looms on January 1, 2026

Deadline Alert: PAN Deactivation Looms on January 1, 2026

Issue: To warn taxpayers about the mandatory requirement set by the Central Board of Direct Taxes (CBDT) to link their Permanent Account Number (PAN) with their Aadhaar number to prevent the deactivation of their PAN.

Facts:

• The Permanent Account Number (PAN) is a crucial identifier used for filing Income Tax Returns (ITR), opening bank accounts, and numerous other financial activities.
• The CBDT mandate requires all PAN card holders to mandatorily link their PAN with their Aadhaar numbers by the stipulated deadline.
• The date cited for the potential deactivation is January 1, 2026.

Decision:

All PAN card holders must mandatorily link their PAN with their Aadhaar number before the deadline to prevent their PAN from becoming inoperative from January 1, 2026.

Key TakeDowns:

• Mandatory Action: Taxpayers must ensure the PAN-Aadhaar linkage is completed through the Income Tax e-filing portal.
• Consequences of Deactivation: A deactivated PAN leads to severe financial and legal problems. These consequences include:
  • Inability to open bank or demat accounts.
  • Prohibition on making cash deposits or fixed deposits above ₹50,000.
  • Inability to apply for loans, purchase/sell property or vehicles, or conduct business.
  • Higher Tax Deducted at Source (TDS) rates will be applicable on all income .
• Official Mandate: The mandate was officially notified by the Ministry of Finance via CBDT notification number 26/2025 in April.