Provisions of section 234H of the Income Tax Act are recently inserted vide the Finance Act, 2021. Accordingly, section 234H is made effective from 1st April 2021. It deals with the late fees payable on account of failure to intimate the Aadhaar number to the Income Tax Department (i.e., link the PAN with Aadhaar). The provisions of section 234H are briefly explained in the present article.

Mandatory requirement of linking the Aadhaar number-

Provisions of section 139AA of the Income Tax Act deals with the mandatory requirement of linking of the Aadhaar number. The provisions were introduced basically to robust the way of de-duplication of PAN database.

The linking provisions are summarized hereunder-

Particulars Manner of intimating/ linking the Aadhaar number
A person applying for allotment of PAN on or after 1st July 2017 Aadhaar number or enrolment ID is to be quoted in the PAN application form.
A person who already possess PAN as on 1st July 2017 Needs to intimate the Aadhaar number (i.e., needs to link the Aadhaar number with PAN). Such linking is possible through both via SMS or via website.

Late fees for non-linking of PAN with Aadhaar [Section 234H]-

Late fees for non-linking of PAN with Aadhaar is payable as per provisions of section 234H when the following two conditions are satisfied-

Condition 1 – The person is required to intimate (i.e., link) the Aadhaar number under section 139AA(2); and

Condition 2 – The person fails to intimate (i.e., link) the same within the specified due date.

It is important to note here that, post various extensions, currently, the due date for linking the PAN with Aadhaar is 30th September 2021.

Amount payable as a late fee under section 234H of the Income Tax Act

The defaulter will be liable to pay a late fee of a maximum amount of INR 1,000. The said late fees are payable at the time of making intimation as required under section 139AA(2).

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September 2021