Fee for default in linking Aadhaar and PAN – U/s 234H

• As per Section 139AA, it is mandatory for every person who has been allotted PAN as on 1^st July 2017 and who is eligible to obtain Aadhaar number, shall link his Aadhaar number with PAN. As per latest notification, the due date for such linking has been extended to 30^th June 2021.
• If any person fails to link his Aadhaar number with PAN on or before the due date for linking (currently 30^th June 2021), while linking Aadhar number with PAN after due date such person has to pay penalty fee not exceeding Rs.1,000 as introduced under new Section 234H by Finance Act, 2021.
• Further, there are some other adverse impacts also for non-linking of Aadhaar number with PAN; which are as under:

a) Person will not be able to file the Income Tax Return (ITR); which will lead to consequences for non-filing of ITR like payment of fee for default in furnishing return of income u/s 234F, Interest u/s 234A for late filing of ITR, no carry forward of current year’s losses, non-availability of certain deduction which are linked with filing of ITR within due dates e.g. Section 80P, 80-IA, Section 11, etc; prosecution for failure to furnish return of income, penalty for concealment of income, etc.

b) Deduction of TDS at higher rate as per section 206AA or 206AB.

c) Deduction of TDS at higher rate as per section 206CC or 206CCA.

d) A penalty of Rs.10,000 shall be levied u/s 272B, if such person shall not be able to comply with the provisions of section 139A requiring him to quote his PAN in certain financial transactions, etc.