Section 430 · Collection & recovery
Section 430 of the Income-tax Act, 2025 — Fee for Default in Intimation of Aadhaar Number (PAN-Aadhaar Linking Late Fee)
By CA Rajat Agrawal
Updated 05 Jul 2026
Chapter XIX
📜 What the law says — Section 430, Income-tax Act 2025
430. Without prejudice to the provisions of this Act, where a person is required to
intimate his Aadhaar number under section 262(6) 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 ` 1000, at the time of making intimation
under the said section after the said date.
CHAPTER XX
REFUNDS
Refunds.
In plain language
What Section 430 says in plain English
Section 430 of the Income-tax Act, 2025 imposes a fee (not a penalty) on any person who was required to intimate their Aadhaar number under Section 262(6) but failed to do so by the prescribed date. In simple words, if you did not link your PAN with your Aadhaar within the deadline, you must pay a late fee when you finally do the linking. The statute caps this fee at ₹1,000, and the exact amount and cut-off dates are fixed by the Income-tax Rules (delegated legislation), not by the Act itself.
This provision is the direct successor to the old Section 234H of the Income-tax Act, 1961 (which was inserted by the Finance Act, 2021). The language, the ₹1,000 ceiling and the underlying purpose are carried forward almost unchanged into the 2025 Act, which took effect from 1 April 2026.
Who does it apply to?
- Every person holding a PAN who is also eligible for Aadhaar and is therefore required under Section 262(6) to link the two. This covers the vast majority of resident individual taxpayers.
- People who missed the linking deadline. The fee only bites when there is a default — i.e. you link after the prescribed date. If you linked on time, no fee applies.
- It is triggered at the moment of intimation (linking) after the deadline, so it is a one-time fee payable to make the process go through.
Who is generally NOT covered
- Persons exempt from Aadhaar-PAN linking under the notified exemptions — typically non-residents (NRIs) as per Indian tax law, individuals aged 80 years or more (super senior citizens) during the year, non-citizens of India, and residents of specified states (historically Assam, Meghalaya, and Jammu & Kashmir). These categories are exempt from the linking mandate, so the Section 430 fee does not arise for them.
- People who do not need a PAN at all, and hence have no Section 262(6) obligation.
How much is the fee?
The Act sets only the maximum ceiling of ₹1,000. In practice, under the rules carried over from the 234H regime, the fee has been structured as ₹500 for a short initial window and ₹1,000 thereafter. As the linking window has long closed for most taxpayers, the operative fee is effectively ₹1,000 for anyone linking late today. The government can re-notify a lower or graded fee, but it can never exceed the ₹1,000 statutory cap.
The bigger consequence: inoperative PAN
Section 430 is described as operating "without prejudice to the other provisions of the Act". That is crucial: paying the ₹1,000 fee is not the only consequence of non-linking. Under the PAN framework in Section 262 (read with the Income-tax Rules, 2026), a PAN that is not linked to Aadhaar becomes inoperative. An inoperative PAN causes serious downstream problems:
- Higher TDS/TCS: Tax may be deducted or collected at higher rates as if no PAN were furnished (the higher-rate provisions kick in).
- Refunds may be withheld and no interest paid on withheld refunds for the inoperative period.
- Blocked transactions: You cannot smoothly file returns, open certain accounts, or complete high-value transactions requiring a valid PAN.
To make the PAN operative again, you must intimate the Aadhaar and pay the Section 430 fee; the PAN generally becomes operative within about 30 days of successful linking.
How it interacts with related sections
- Section 262 (esp. 262(6)): This is the parent provision that mandates Aadhaar intimation/PAN-Aadhaar linking. Section 430 is the consequence for defaulting on that mandate. It replaces the old Sections 139A and 139AA.
- TDS/TCS higher-rate sections: Because an inoperative PAN is treated like "no PAN", the higher deduction/collection rules apply — a much costlier consequence than the ₹1,000 fee itself.
- Refund and interest provisions: Interest on refunds is not paid for the period the PAN stays inoperative.
Practical implications for taxpayers
- Treat the ₹1,000 as the smallest part of the problem — the real cost is the inoperative-PAN cascade (higher TDS, blocked refunds, stalled filings).
- Always pay the fee first (via a challan on the e-filing portal, tax type generally reflected as "Other Receipts / Fee under the Aadhaar provisions"), then submit the linking request; the request will not go through until the fee is paid.
- Keep the linking-status confirmation, as the PAN may take up to ~30 days to become operative again.
💡 Example
Worked example 1 — Salaried individual linking late. Rohan, a Jaipur-based salaried professional, missed every PAN-Aadhaar linking deadline. In July 2026 his employer flags that his PAN is inoperative. To fix it, Rohan pays the Section 430 fee of ₹1,000 on the e-filing portal and then submits the linking request. His PAN becomes operative about three weeks later. The direct fee was only ₹1,000 — but in the months his PAN was inoperative, his bank had deducted TDS on his fixed-deposit interest at 20% instead of the usual 10%, costing him far more than the fee.
Worked example 2 — Cost of delay. Meena had FD interest of ₹2,00,000 in a year when her PAN was inoperative. Normal TDS at 10% = ₹20,000. With an inoperative PAN treated as "no PAN", TDS was charged at 20% = ₹40,000 — an extra ₹20,000 blocked with the department. Add the ₹1,000 Section 430 fee, and her total avoidable cost was about ₹21,000, all recoverable only later through a return once the PAN was made operative.
A relatable story. Think of Section 430 like a library that fines you for returning a book late. The ₹1,000 fine stings a little, but the bigger issue is that until you clear it, your library card (your PAN) stays frozen — you cannot borrow anything, renew memberships, or use the reading room. Clearing the small fine is what "unfreezes" your card. Most taxpayers focus on the ₹1,000, but the smart ones link on time to avoid ever having their PAN frozen at all.
| Aspect | Section 430, Income-tax Act 2025 | Old Section 234H, Income-tax Act 1961 |
|---|
| Nature of levy | Fee (not penalty) for default in Aadhaar intimation | Fee for default in Aadhaar intimation |
| Triggering / parent section | Section 262(6) (PAN-Aadhaar linking mandate) | Section 139AA |
| Maximum fee (statutory cap) | ₹1,000 | ₹1,000 |
| Fee actually notified | Effectively ₹1,000 for late linking now (rules may re-notify, subject to cap) | ₹500 for initial window, then ₹1,000 |
| When payable | At the time of intimating Aadhaar after the prescribed date | At the time of linking after the due date |
| Key collateral consequence | PAN becomes inoperative; higher TDS/TCS, refunds withheld | PAN becomes inoperative; higher TDS/TCS |
| Effective from | 1 April 2026 | 1 April 2021 (Finance Act, 2021) |
Related sections
Section 262 — PAN: allotment, quoting and mandatory Aadhaar linking (replaces 139A/139AA) Section 234H (1961 Act) — the predecessor fee for Aadhaar-intimation default Section 396 — Quoting and authentication of PAN and Aadhaar Section 393 — TDS at higher rate where PAN is not furnished / inoperative Section 429 — Fee for default in furnishing statements (TDS/TCS returns) Section 433 — Interest on refunds and withholding during default periods
Frequently asked questions
How much is the fee under Section 430 for late PAN-Aadhaar linking?
The Act caps the fee at ₹1,000. In practice, for anyone linking late today the operative fee is ₹1,000, payable on the e-filing portal before the linking request goes through.
Is Section 430 a penalty or a fee?
It is a fee, not a penalty. This is important because a fee is a fixed levy for the default and does not require a separate penalty proceeding, show-cause notice, or assessing officer's discretion.
What is the difference between Section 430 and the old Section 234H?
They are essentially the same levy. Section 430 of the Income-tax Act, 2025 replaces Section 234H of the 1961 Act, keeping the same ₹1,000 ceiling but linking it to the new Section 262(6) instead of the old Section 139AA.
Do NRIs and senior citizens have to pay the Section 430 fee?
Generally no. Persons exempt from PAN-Aadhaar linking — such as non-residents, super senior citizens (80+), non-citizens, and residents of certain notified states — are outside the Section 262(6) mandate, so the fee does not apply to them.
What happens if I just pay the ₹1,000 but my PAN is still inoperative?
Paying the fee is the trigger to submit the linking request; once linking succeeds, the PAN usually becomes operative within about 30 days. Until it is operative, higher TDS/TCS and refund restrictions can still apply.
Can the government charge more than ₹1,000 under Section 430?
No. ₹1,000 is the statutory ceiling written into the Act. The rules can prescribe the exact amount or a graded fee, but it can never exceed ₹1,000.
Is the ₹1,000 fee the only cost of not linking PAN with Aadhaar?
No, and this is the biggest misconception. The far larger cost comes from the PAN becoming inoperative — higher TDS/TCS rates, withheld refunds with no interest, and blocked filings and transactions.
C
CA Rajat Agrawal
Chartered Accountant, EaseValue · Reviewed 05 Jul 2026
This explainer is prepared and reviewed by EaseValue's tax team, based on the text of the Income-tax Act, 2025 (as amended by the Finance Act, 2026).
Disclaimer: This page explains the law in general terms for education and is not professional advice. The Income-tax Act, 2025 takes effect from 1 April 2026; provisions, thresholds and interpretations may change. Please confirm your specific position with our team before acting.
💬 Discussion & questions
0 comments · Ask anything about this — a Chartered Accountant or the community will reply.
Have a doubt about this (Section 430)? Ask here 👇
Free · takes 20 seconds · our CA answers. No account needed.
No comments yet — be the first to ask. 👆
EaseValue