Graph Neural Networks (GNNs) excel in handling graph-structured data but often underperform in link prediction tasks compared to classical methods, mainly due to the limitations of the commonly used Message Passing GNNs (MPNNs). Notably, their ability to distinguish non-isomorphic graphs is limited by the 1-dimensional Weisfeiler-Lehman test. Our study presents a novel method to enhance the expressivity of GNNs by embedding induced subgraphs into the graph Laplacian matrix's eigenbasis. We introduce a Learnable Lanczos algorithm with Linear Constraints (LLwLC), proposing two novel subgraph extraction strategies: encoding vertex-deleted subgraphs and applying Neumann eigenvalue constraints. For the former, we conjecture that LLwLC establishes a universal approximator, offering efficient time complexity. The latter focuses on link representations enabling differentiation between $k$-regular graphs and node automorphism, a vital aspect for link prediction tasks. Our approach results in an extremely lightweight architecture, reducing the need for extensive training datasets. Empirically, our method improves performance in challenging link prediction tasks across benchmark datasets, establishing its practical utility and supporting our theoretical findings. Notably, LLwLC achieves 20x and 10x speedup by only requiring 5% and 10% data from the PubMed and OGBL-Vessel datasets while comparing to the state-of-the-art.