Section 467 of the Income-tax Act, 2025 — Penalty for PAN and Aadhaar Defaults (₹10,000 per Default)

In plain language

What Section 467 actually deals with

Section 467 of the Income-tax Act, 2025 is the penalty provision for failure to comply with the PAN (Permanent Account Number) and Aadhaar rules laid down in Section 262 of the same Act. In simple words, if you are required to obtain, quote, intimate or authenticate your PAN or Aadhaar and you either don't do it, or you give a wrong or false number, the Assessing Officer can levy a penalty of ₹10,000 for each such default.

This section is the direct successor to Section 272B of the old Income-tax Act, 1961. The wording has been modernised and reorganised, but the core idea and the ₹10,000 figure are carried forward. It became effective from 1 April 2026 along with the rest of the new Act.

Who it applies to

• Every taxpayer — individuals, HUFs, firms, companies, trusts — who is required to have and quote a PAN/Aadhaar.
• Anyone entering specified high-value transactions where quoting PAN/Aadhaar is mandatory (buying property, large bank deposits, purchase of vehicles, mutual funds/shares above limits, etc.).
• Persons "responsible for" collecting and verifying PAN/Aadhaar — for example a bank, registrar, mutual fund, or other reporting entity that must ensure the correct number is quoted and authenticated in prescribed documents.

The four situations that attract the ₹10,000 penalty

• 467(1) — General non-compliance with Section 262: failing to obtain or comply with the PAN/Aadhaar obligations. Penalty ₹10,000.
• 467(2) — False number: quoting or intimating a PAN/Aadhaar that is false, knowing or believing it to be false. Penalty ₹10,000 for each such default.
• 467(3) — Failure to quote/authenticate: failing to quote or authenticate PAN/Aadhaar in a document referred to in Section 262(9)(a). Penalty ₹10,000 for each such default.
• 467(4) — Responsible person default: a person under Section 262(9)(b) who must ensure correct quoting/authentication in prescribed transaction documents but fails to do so. Penalty ₹10,000 for each such default.

Key point: "for each such default"

This is the sting in the tail. The ₹10,000 is not a one-time cap. Where the law says "each such default," a reporting entity that mis-records 50 customers' PANs could in principle face 50 separate ₹10,000 penalties. That said, courts have historically read this reasonably — a single wrong PAN quoted once is one default, not multiplied across every line it appears in.

How it interacts with other sections

• Section 262 is the charging/obligation section (successor to old Section 139A). Section 467 only bites if Section 262 has been breached — the two must be read together.
• Opportunity of being heard: under the general penalty machinery of the 2025 Act (Section 471), no penalty can be imposed without a show-cause notice and a reasonable opportunity to explain.
• Reasonable cause relief: the 2025 Act retains the old Section 273B principle — if you prove a genuine, bona fide reasonable cause for the default, no penalty shall be levied. (The exact renumbered section should be confirmed against the bare Act.)
• Time limit: Section 472 bars a penalty order after the prescribed limitation period (broadly six months from the end of the relevant quarter).

Practical implications

• Always quote your correct, active PAN (or Aadhaar where permitted) — a typo can technically be a "false" number.
• If your PAN has become inoperative due to PAN-Aadhaar non-linking, transactions may be treated as PAN-not-quoted — link them to avoid exposure.
• Banks, sub-registrars and financial institutions should build PAN validation and Aadhaar authentication checks into their onboarding to avoid per-default penalties.
• The penalty is discretionary ("may impose"), not automatic — a well-documented reasonable cause is your best defence.