Today, December 31, is not just the end of the calendar year. It is also a hard deadline for several tax, money and banking-related tasks. Missing these cut-offs can mean losing income tax refunds, paying penalties or facing banking disruptions in 2026. The day also marks an important milestone for government employees, as the 10-year tenure of the 7th Pay Commission ends today.
Here are the major financial and money-related tasks that taxpayers need to complete today.
Last day to file belated or revised income tax returns
Taxpayers who missed the original ITR deadline of September 16 for FY 2024-25 have one final opportunity today to file a belated or revised return. After December 31, the option to file the return closes completely, and any pending income tax refund is lost permanently.
Refunds are issued only if a valid income tax return is filed. If excess tax or TDS was deducted during the year and the return is not filed by today, the refund cannot be claimed later. Belated or revised return can be filed with a penalty up to Rs 5,000.
PAN–Aadhaar linking deadline for specified PAN holders
December 31 is the cut-off for mandatory PAN–Aadhaar linking for certain PAN holders, especially those allotted PAN using Aadhaar enrolment ID. If the linking is not completed by today, the PAN may become inoperative from January 1, affecting income tax filing, banking transactions, mutual funds, demat accounts and other KYC-linked services. Late linking attracts a Rs 1,000 penalty.
Year-end tax-saving actions to avoid data mismatches
For salaried taxpayers, December 31 also works as a practical year-end deadline for completing tax-saving investments and insurance payments such as ELSS, PPF, NPS and health insurance. Delays can result in mismatches in Form 16, AIS or Form 26AS, increasing the chances of revisions or follow-ups later.
Check AIS and Form 26AS before the year closes
Taxpayers are advised to review their Annual Information Statement (AIS) and Form 26AS for incorrect income entries or missing TDS credits. Spotting and flagging errors before the year ends can help avoid notices and compliance issues in 2026.
TDS and compliance deadlines for professionals and businesses
For professionals and small business owners, several year-end TDS and TCS filings, corrections and reconciliations align with December 31. Missing these timelines can attract interest and penalties under tax laws.
7th Pay Commission tenure ends today
December 31 also marks the end of the 7th Central Pay Commission’s tenure, which has governed the salaries, allowances and pensions of central government employees since January 1, 2016.
While no immediate salary revision takes effect from January 1 under the 8th Pay Commission, the end of the current panel closes a decade-long pay cycle and shifts the focus to what comes next.
The newly appointed pay commission is expected to revise salaries and pensions from where the 7th Pay Commission leaves off. Its recommendations are likely to come into effect after about two years, with the benefits expected to be paid retrospectively from January 1.
What changes from January 1, 2026
From tomorrow, PANs not linked with Aadhaar (where mandatory) may become inoperative, stricter banking and digital payment security norms will apply, and delayed compliance will be processed under 2026 rules instead of 2025 norms.
Taxpayers who miss the December 31 deadline to file a belated or revised ITR will lose their right to claim any pending income tax refund. However, they still have the option to file an updated return. An updated ITR can be filed within 48 months from the end of the relevant assessment year, but it comes with several restrictions. Taxpayers cannot claim refunds, carry forward losses or reduce their tax liability, and additional tax and interest may also be payable.
Summing up…
December 31 is the last clean-up day for taxes, banking and compliance. Completing these tasks today can help taxpayers and government employees start 2026 without penalties, blocked PANs or missed refunds.