This is the third extension given by the government to individuals to link the Permanent Account Number (PAN) with the biometric ID.
The Centre had already informed the Supreme Court that it is willing to extend till March 31 the deadline fixed for mandatory linking of Aadhaar to avail various services and welfare schemes.
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"Therefore, to facilitate the process of linking, it has been decided to further extend the time for linking of Aadhaar with PAN till March 31, 2018," the finance ministry said.
As of November, 132.8 million out of 330 million PANs have been linked to the 12-digit biometric identifier Aadhaar.
This year, the government made quoting of Aadhaar mandatory for filing income tax returns (ITRs) as well as obtaining a new PAN.
Section 139 AA (2) of the Income Tax Act says that every person having PAN as on July 1, 2017, and eligible to obtain Aadhaar, must intimate his Aadhaar number to the tax authorities.
The government had in August extended by four months the deadline for linking PAN with Aadhaar till December 31, pending the Supreme Court verdict.
The Supreme Court is hearing petitions challenging the government's decision on Aadhaar.
The apex court has said it may consider setting up of a constitution bench to hear pleas challenging the Centre's move to make Aadhaar card mandatory for availing various services and benefits of welfare schemes.
The deadline for linking PAN with Aadhaar previously was July 31 but was extended toAugust 31 and later to December 31, 2017.