Section 234H Fee/Penalty for not linking PAN with Aadhaar

Section 234H Penalty for not linking PAN with Aadhaar
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Section 234H Fee/Penalty for not linking PAN with Aadhaar

Link your PAN with Aadhaar before 31st March 2021 30th June 2021 else the PAN shall become inoperative.

The date to link Aadhaar with PAN was extended from 31st March 2021 to 30th June 2021. Announcement for the same was done by the Official Twitter handle of Income Tax India at 7:54 pm on 31st March 2021. A screenshot of the Tweet has been attached for your ready reference.

Refer Interesting Fact >> TAB to link Aadhaar with PAN goes missing from Income Tax portal on 31st March 2021

 

The day is not far when your employer will ask for proof of whether your PAN is linked with your Aadhar number or not. This will help them to ascertain at what rate the tax needs to be deducted. 

 Section 234H of Income Tax Act 1961 – Fee for default relating to the intimation of Aadhaar number 

(Inserted vide Finance Bill 2021 w.e.f. 01.04.2021)

If a person defaults in linking the Aadhar Number with a Permanent Account Number then a penalty/fees up to Rs. 1,000/- shall be levied.

It is a specific penalty for non-compliance with the provisions of Section 139AA(2) introduced on 23rd March 2021 by amending the Finance Bill 2021.

 Section 139AA of Income Tax Act 1961 – Quoting of Aadhaar number 

(Inserted vide Finance Act 2017 w.e.f. 01.04.2017)

Section 139AA(1) of Income Tax Act 1961

If a person is eligible to obtain an Aadhaar number then it is mandatory to quote either the 12-digit Aadhaar number or the 28 digit enrolment ID of the Aadhaar number.

⇒ while making an application for allotment of PAN in Form  49A.

⇒ while filing return of income

 Section 139AA(2) of Income Tax Act 1961 

⇒ It is mandatory for every person who is eligible to obtain an Aadhaar Number to link their permanent account number with the Aadhaar number before the prescribed due date.

⇒ Central Government has further extended the date to link Aadhaar with PAN from 31st March 2020 to 31st March 2021 to 30th June 2021.

⇒ In case if the person fails to link both then, the PAN so allotted shall be deemed invalid/inoperative from 1st April 2021   from 1st July 2021.

⇒ When PAN becomes inoperative/deemed invalid, the person shall be liable to face consequences as if he had not applied for the PAN, not allotted the PAN, not furnished the PAN, or not quoted the PAN.

 Section 139AA(3) of Income Tax Act 1961 

⇒ Mandatory linking of PAN with Aadhaar shall not be applicable for the persons or class of persons as may be notified by the Central Government.

⇒ Non-resident taxable person

⇒ Not a citizen of India

⇒ Super Senior Citizens (80 years and above)

⇒ Individuals from Assam, Meghalaya, and Jammu & Kashmir

 Is it possible to link PAN with Aadhaar after it becomes inoperative/ invalid? 

YES. The PAN can be made operative by linking it with Aadhaar. PAN will again become operative from the date of linking/intimation of the Aadhaar Number. But the penalty/fees u/s 234H  shall be levied when the person will link/intimate the Aadhar after it becomes inoperative.

 Consequences of not linking PAN with Aadhaar  

Section 206AA of Income Tax Act 1961 – TDS would be deducted at a higher rate if the PAN is not furnished by the payee.

Section 206CC of Income Tax Act 1961 –  TCS would be collected at a higher rate if the PAN is not furnished.

Section 234A 234B 234C of Income Tax Act 1961 Taxpayers will not be allowed to furnish the return of income before linking. Defaults in furnishing return will attract interest u/s 234A, 234B, and 234C.

Section 234F of Income Tax Act 1961 Taxpayers will not be allowed to furnish the return of income before linking. Non-filing of return will attract a penalty up to Rs 10,000/-  u/s 234F.

Section 234H of Income Tax Act 1961 Taxpayer will be able to make PAN operative only upon linking it with Aadhaar and paying a  fees/penalty of up to Rs 1,000/-.

Section 272B of Income Tax Act 1961 – It is mandatory to quote PAN for certain financial transactions as per section 139A. If the PAN is not linked it will become inoperative/invalid and this would result in non-compliance with the provisions of Section 139A which would attract a penalty up to Rs 10,000/- u/s 272B.

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About CA Ankita Khetan 163 Articles
Ankita is a Chartered Accountant in practice and holds a Diploma in IFRS (from ACCA, UK). She is also a Commerce PG and Certified Independent Director (from IICA). She holds a certification in Forex and Treasury Management. Her area of expertise is GST and Income tax. She is passionate about reading, writing, and sharing knowledge on areas related to finance and taxation.

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