With the deadline fast approaching, the Income Tax Department is reminding PAN holders to link their PAN with their Aadhaar. The process is mandatory for most taxpayers, and failure to comply will render the PAN inoperative from January 1, 2026. This can lead to disruptions in financial transactions, tax filings, and refunds. However, certain categories of individuals are exempt from this requirement.

Who is Exempt?

The following individuals are not required to link their PAN with Aadhaar:

• Non-Resident Indians (NRIs): Individuals defined as non-residents under the Income-tax Act, 1961, are exempt. However, if an NRI holds an Aadhaar card, linking it to PAN is mandatory. It's crucial for NRIs to ensure their residential status is correctly updated in the Income Tax Department's records.
• Senior Citizens (80 years or older): Individuals who are 80 years or older at any time during the previous year are exempt. This exemption acknowledges the potential difficulties this age group might face in complying with digital requirements.
• Residents of Specific States: Residents of Assam, Jammu & Kashmir, and Meghalaya are exempt from the mandatory linking.
• Non-Citizens of India: Individuals who are not citizens of India are also exempt.

Implications for Minors and Joint Holders

While the regulations don't explicitly mention minors or joint account holders, here's how the rules generally apply:

• Minors: There is no age restriction for obtaining a PAN card. A minor's PAN card does not have a photograph or signature. If a minor has a PAN and Aadhaar, linking is generally required unless they fall into one of the exempt categories. Documents needed for PAN application include proof of identity and address of the minor's parent or guardian, the minor's date of birth proof, and a copy of the Aadhaar Card.
• Joint Holders: The linking requirement applies to each individual PAN holder. If you are a joint holder, you must link your PAN to your Aadhaar, provided you are not exempt.

How NRIs Can Link (If Applicable)

Even though it is not mandatory, NRIs can link their Aadhaar with PAN if they wish to file tax returns in India or conduct financial transactions.

Here's how NRIs can link their Aadhaar to PAN:

1. Online Method: Visit the Income Tax e-filing website and click on "Link Aadhaar". Provide your PAN, Aadhaar number, and other required details. Verify the details using the OTP sent to your Aadhaar-linked mobile number and submit the request.
2. Through Jurisdictional Assessing Officer (JAO): Locate your JAO through the Income Tax Department's official website. Download Form VCP (Voluntary Correction of PAN Data) and fill in the required details, stating the requirement to link your PAN card with your Aadhaar card. Attach a copy of your PAN card, passport (for showing your NRI status), and a document showing proof of your current address abroad.

Important Considerations

• Deadline: The deadline to link PAN with Aadhaar is December 31, 2025.
• Penalty: Taxpayers who have not linked their PAN and Aadhaar so far will need to pay a late fee of ₹1,000 before proceeding with the linking process. However, PAN holders who obtained their PAN card after October 1, 2024, using an Aadhaar enrolment ID are exempt from the penalty if they complete the linking process by December 31, 2025.
• Inoperative PAN: After the deadline, unlinked PANs will become inoperative. This will prevent the use of PAN for key financial and tax-related transactions. A higher TDS rate of 20% is applicable if you have not linked your PAN with your Aadhaar.
• Verification: Ensure that the details (name, date of birth, gender) on both your PAN and Aadhaar match exactly. Any discrepancies can cause the linking to fail.
• How to Check Link Status: To check the status of your PAN-Aadhaar linking, visit the Income Tax e-filing portal and click on "Link Aadhaar Status". Enter your PAN and Aadhaar number to view the linking status.
• Aadhaar Enrolment ID: Individuals who obtained their PAN card using an Aadhaar Enrolment ID must update it with their actual Aadhaar number by December 31, 2025.
• Linking Methods: You can link PAN and Aadhaar through the Income Tax e-filing portal or via SMS.