PAN Card Inactive — Meaning, Penalty & Reactivation Guide
Urgent Warning
As of July 1, 2023, all PAN cards not linked with Aadhaar have become Inoperative. An inoperative PAN cannot be used for filing ITR, opening bank accounts, or high-value transactions. Pending refunds will be halted. To reactivate, you must link PAN with Aadhaar and pay a penalty of ₹1,000. Reactivation takes up to 30 days after linking.
Why is My PAN Inactive?
The primary reason for mass deactivation is the government mandate to link PAN with Aadhaar.
Failure to Link Aadhaar
If you missed the June 30, 2023 deadline, your PAN is now inoperative. This is the most common cause.
Duplicate PANs
If you inadvertently held two PAN cards and one was flagged, it may have been deactivated by the Assessing Officer.
Consequences of Inoperative PAN
- No ITR Filing: You cannot file Income Tax Returns.
- Pending Refunds Stuck: Interest on refunds stops; refunds will not be issued.
- Higher TDS/TCS: Tax will be deducted at a much higher rate (up to 20%) for inoperative PANs.
- Banking Blocks: Cannot open new accounts, submit Form 15G/15H, or deposit >₹50k cash.
- Debit/Credit Cards: Cannot apply for new cards.
How to Reactivate PAN (Step-by-Step)
Pay the Penalty (₹1,000)
Visit the e-Filing portal. Use Challan No./ITNS 280. Select "Other Receipts (500)". Pay ₹1,000. Keep the challan receipt.
Submit Linking Request
Wait 4-5 days after payment for it to reflect. Then go to e-Filing portal > "Link Aadhaar". Enter PAN and Aadhaar. It will verify the payment.
Wait for Reactivation
After successful linking submission, PAN will become operative again within 30 days. Check status regularly.
FAQs
Is the ₹1,000 fee mandatory?
Yes. There is no waiver. The free deadline passed in 2022, and the ₹500 window passed in 2023. Now it is ₹1,000 flat penalty.
Can I get a salary with inactive PAN?
Your employer can still credit salary, BUT they are legally required to deduct TDS at the maximum marginal rate (20% or higher) if your PAN is inoperative. This means significantly less take-home pay.