Home / Income-tax Act 2025 / Section 467

Section 467 Income Tax Act 2025: What Is the Penalty for PAN and Aadhaar Non-Compliance?

Section 467 prescribes penalties for failing to comply with Permanent Account Number (PAN) and Aadhaar requirements, including incorrect quotation, non-authentication and failures by persons responsible for verifying prescribed transactions.

Current legal position (12 November 2026): The Income-tax Act, 2025 applies from 1 April 2026. The Finance Act, 2026 substituted the heading of Section 467 to refer to Sections 262 and 397, but its operative subsection (1) refers to Section 262. Section 468 separately deals with specified Section 397 failures. Always read the amended statutory text.

What is the penalty under Section 467?

The Assessing Officer may impose a penalty of Rs. 10,000 for a failure covered by Section 467(1). For the specific defaults in subsections (2), (3) and (4), the amount is Rs. 10,000 for each such default. The provision uses the word "may"; a penalty should not be described as automatic merely because a discrepancy is identified.

Key distinction: A simple clerical error is not necessarily the same as knowingly furnishing a false number under subsection (2). The facts, statutory duty and evidence matter.

Section 467 explained subsection by subsection

Section 467(1): Failure to comply with Section 262

Where a person fails to comply with the PAN provisions of Section 262, the Assessing Officer may impose a penalty of Rs. 10,000. The relevant obligation must be identified before alleging a default.

Section 467(2): Knowingly quoting or intimating a false number

Where a person required to quote or intimate PAN or Aadhaar in a document referred to in Section 262(9)(a) knowingly or believing it to be false provides, quotes or intimates a false number, a penalty of Rs. 10,000 may be imposed for each default.

Section 467(3): Failure to quote or authenticate PAN or Aadhaar

Where a person fails to quote or authenticate PAN or Aadhaar in a document covered by Section 262(9)(a), the Assessing Officer may impose Rs. 10,000 for each default.

Section 467(4): Failure by the person responsible for verification

A person responsible under Section 262(9)(b) for ensuring correct quotation or authentication of PAN or Aadhaar in documents relating to prescribed transactions may be penalised Rs. 10,000 for each failure to discharge that duty.

Relevant statutory terms and provisions

Permanent Account Number (PAN): The tax identification number allotted under Section 262; the section governs relevant application, quotation and authentication obligations.
Aadhaar number: The identification number referred to in the Aadhaar legal framework, where its quotation or authentication is required by applicable income-tax provisions.
Prescribed transaction: A transaction or document category specified under applicable rules for the purposes of Section 262(9)(a); do not assume every transaction requires PAN or Aadhaar authentication.
Assessing Officer: The income-tax authority empowered under the Act to administer assessments and, under Section 467, impose the specified penalty.
Reasonable cause: A factual justification established by the person concerned for a statutory failure; Section 470 protects covered failures when reasonable cause is proved.

Practical examples of the penalty

Example 1: Knowingly using a false PAN

A person deliberately supplies a PAN known to be false in two separately prescribed transaction documents. If both are proved defaults under Section 467(2), the illustrative penalty is Rs. 10,000 x 2 = Rs. 20,000.

Example 2: Failure to authenticate

A person who is legally required to authenticate PAN or Aadhaar in one prescribed transaction fails to do so. Section 467(3) permits a penalty of Rs. 10,000 for that default, subject to applicable safeguards and relief.

Example 3: Institution fails to verify

An institution required under Section 262(9)(b) to ensure correct quotation or authentication fails in three distinct prescribed transactions. The illustrative exposure under Section 467(4) is Rs. 30,000, if each default is established.

Can the penalty be avoided or challenged?

Section 470: No penalty is to be imposed for a failure covered by Section 467 where the person proves reasonable cause. Supporting records may include a correction trail, system-failure evidence, communications, transaction records and proof of timely remedial action.

Section 471: The applicable penalty procedure, including the opportunity to be heard, must be followed. Section 472 addresses limitation for imposing penalties. A taxpayer should verify the notice, identify the precise subsection invoked, and respond with evidence.

Earlier law: Section 467 broadly corresponds to Section 272B of the Income-tax Act, 1961. Earlier decisions may offer interpretive guidance, but should be checked against the wording and facts under the 2025 Act.

Frequently asked questions

Is the Section 467 penalty Rs. 10,000 per day?

No. Section 467 does not prescribe a daily rate. Its specified per-default penalties apply to the defaults described in subsections (2), (3) and (4).

Does every PAN typing mistake attract a penalty?

Not necessarily. Subsection (2) requires the specified knowledge or belief concerning falsity. Other subsections have different requirements. The precise statutory obligation and any reasonable cause must be considered.

Who can impose the penalty?

Section 467 identifies the Assessing Officer as the authority empowered to impose the penalty.

Does Section 467 cover TAN defaults?

Section 468 separately addresses specified failures relating to Section 397, including the Tax Deduction and Collection Account Number. The Finance Act, 2026 amended the heading of Section 467, so the heading and operative provisions should be read carefully.

Official law and useful resources

Official Income-tax Act 2025 (amended 2026)Income Tax e-Filing Portal

Last reviewed: 12 November 2026. This article is general legal information; transaction-specific rules and current notifications should be checked before taking action.