Draft Rule 162 of the Income-tax Rules, 2026 specifies that where a person allotted a Permanent Account Number (PAN) fails to intimate his Aadhaar number as required under section 262(6), the PAN shall become inoperative and the person shall be liable to pay fees in accordance with rule 158. Once Aadhaar is intimated and the prescribed fee is paid, the PAN will become operative within 30 days from the date of intimation. During the period in which the PAN remains inoperative, no refund of tax due under the Act shall be granted, and no interest shall be payable on such refund for that period. Further, tax deductible or collectible at source under Chapter XIX-B shall be deducted or collected at a higher rate in accordance with section 397(2). The rule also authorises the Principal Director General or Director General of Income-tax (Systems) to prescribe formats, standards and procedures for verifying the operational status of PAN, thereby reinforcing compliance with Aadhaar linkage requirements.
Extract of Rule No. 162 of Draft Income-tax Rules, 2026
Rule 162
When PAN becomes inoperative under section 262(6) of the Act.
(1) If a person who had been allotted a Permanent Account Number (PAN) and was required to intimate his Aadhaar number under section 262(6), but failed to do so, then his PAN being inoperative, he shall be liable for payment of fees in accordance with rule 158.
(2) Where the person referred to in sub-rule(1) has intimated his Aadhaar number under section 262(6), after payment of fees in accordance with rule 158 his PAN shall become operative within 30 days from the date of intimation of Aadhaar number.
(3) A person, whose permanent account number has become inoperative, shall be liable for further consequences for the period commencing from the date of commencement of this rule till the date it becomes operative, namely: —
(i) refund of any amount of tax or part thereof, due under the provisions of the Act shall not be made;
(ii) interest shall not be payable on such refund for the period, beginning with the date of commencement of this rule and ending with the date on which it becomes operative;
(iii) where tax is deductible or collectible at source under Chapter XIX-B in case of such person, such tax shall be deducted or collected, as the case may be, at higher rate, in accordance with provisions of section 397(2);
(4) The Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems) shall specify the formats and standards along with the procedure for verifying the operational status of permanent account number under sub-rule (1) and sub-rule (2).
