Finance Act, 2021 has inserted new section i.e. 234H, in the Income-tax Act, 1961 to levy late fee from those PAN holders who fail to intimate their Aadhaar number to income tax department i.e. linking of PAN with Aadhaar, by prescribed last date i.e. 30th June 2021 as of now.

Existing PAN holders as on 1st July 2017 are required to intimate Aadhaar number by 30th June 2021 because from 1st July 2017 new PAN application can be made only with Aadhaar number or Aadhaar enrolment id and for ITR filing too Aadhaar number or enrolment ID is mandatory and without it individual cannot file ITR and who have not linked their PAN with Aadhaar can do so by 30th June 2021 and if you fail in linking PAN with Aadhaar upto extended last date then as per section 234H such person shall be liable for  late fee not exceeding Rs. 1000 at the time of intimating Aadhaar i.e. PAN and Aadhaar linking. If PAN is not linked with Aadhaar then PAN will become inoperative.

Finance Act, 2017 inserted section 139AA in the Income-tax Act, 1961 and the purpose of section 139AA(2) was to eliminate those persons having multiple PAN (there were few persons who had multiple PAN i.e. more than one PAN though holding more than one PAN is punishable with penalty of Rs.10,000 but you understand the things) and that is why this section (139AA(2)) created requirement on all existing PAN holders to get their PAN linked with Aadhaar. One more angle you can link with this sub-section because once your PAN is linked with Aadhaar then government can check about those persons who should get benefit of government schemes or subsidies because many schemes or subsidies are Aadhaar linked. As per section 139AA(1) w.e.f. 1st July 2017, PAN application must contain Aadhaar number or enrolment ID and for ITR filing too Aadhaar number or enrolment ID is mandatory.

For example

Under PM Kisan Yojan (PM Kisan Samman Nidhi Yojna) persons who have paid income tax in last assessment year will not be eligible for PM Kisan Yojna.

Section 139AA(2) of the Income-tax Act, 1961

Every person who has been allotted permanent account number as on the 1st day of July, 2017, and who is eligible to obtain Aadhaar number, shall intimate his Aadhaar number to such authority in such form and manner as may be prescribed, on or before a date to be notified by the Central Government in the Official Gazette:

Provided that in case of failure to intimate the Aadhaar number, the permanent account number allotted to the person shall be made inoperative after the date so notified in such manner as may be prescribed

Section 234H of the Income-tax Act, 1961

Without prejudice to the provisions of this Act, where a person is required to intimate his Aadhaar number under sub-section (2) of section 139AA and such person fails to do so on or before such date, as may be prescribed, he shall be liable to pay such fee, as may be prescribed, not exceeding one thousand rupees, at the time of making intimation under sub-section (2) of section 139AA after the said date.

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Disclaimer – Author has exercised utmost care while writing this article, but still this article may contain some error or mistake and no part of this article/writing should be construed or considered as any advice or consultancy whether professional or otherwise.

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Qualification: CA in Practice
Company: KARACT FILINGS
Location: New Delhi, Delhi, India
Member Since: 26 Jan 2018 | Total Posts: 30
Chartered Accountant having more than 6.5 years of very rich experience in the field of GST, Custom, Income-tax, Company law, LLP law, Corporate law, pre-GST regime indirect tax laws (VAT, Service tax,, Excise law etc.), FCRA, FEMA, Accounting, Financial reporting, Ind-AS, IFRS, stock market etc. View Full Profile

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One Comment

  1. ADVOCATE SARGUN BABUTA says:

    AT THIS CRUCIAL TIME OF OUT BREAK OF PANDEMIC WHERE GOVERNMENT HAS TO GIVE SOME RELIEF TO THE CITIZENS WHO ARE PAYING TAXES IT IS AN ACTION TO PENALISE THEM. ON THE OTHERHAND THE TIME HAS SHOWN SEVERE FINANCIAL ISSUES DUE TO CLOSURE OF WORK OR LOSS IN BUSINESS DUE TO LOCKDOWN. SAD!!!

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