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Comparative Legal Analysis of Aadhaar Intimation Fee Provisions : Clause 430 of the Income Tax Bill, 2025 Vs. Section 234H of the Income-tax Act, 1961
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....urbing tax evasion, and promoting transparency. Clause 430 of the Income Tax Bill, 2025 introduces a statutory provision for levying a fee for failure to intimate the Aadhaar number within the prescribed time. This clause is intended as a successor or replacement to Section 234H of the Income-tax Act, 1961, which was inserted by the Finance Act, 2021, with effect from April 1, 2021, to address similar defaults. Both provisions represent the legislative response to compliance failures concerning Aadhaar intimation. This commentary undertakes a detailed examination of Clause 430, its objectives, structure, and implications, followed by a comparative analysis with Section 234H, to elucidate both the continuity and changes in the statutory regi....
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....for levying a fee operates in addition to, and not in derogation of, other provisions of the Act. Thus, other consequences under the Act (such as invalidation of PAN or other penalties) may still apply, and the fee under Clause 430 is not an exclusive remedy. 2. Trigger for Fee Liability The liability arises when a person, who is statutorily required to intimate his Aadhaar number u/s 262(6), fails to do so by the prescribed date. The provision is thus contingent on two elements: * The existence of a statutory requirement to intimate Aadhaar (presumably in connection with PAN or other tax compliance activities). * Failure to comply with this requirement within the prescribed timeline. 3. Quantum of Fee The fee is to be "as prescribe....
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....red 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." Points of Convergence * Purpose and Structure: Both provisions impose a fee for delayed Aadhaar intimation, capped at one thousand rupees, and are triggered upon belated compliance. * Delegated Legislation: Both leave the actual date of compliance and the quantum of the fee to be prescribed by rules or notifications, allowing flexibility. * Regulatory Character: Both are regulatory fees rather than pen....
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....961 Act) Nature of Default Failure to intimate Aadhaar by prescribed date Failure to intimate Aadhaar by prescribed date Maximum Fee Rs. 1,000 Rs. 1,000 Authority to Prescribe Fee As prescribed (by rules) As prescribed (by rules) Time of Payment At time of belated intimation At time of belated intimation Non-obstante Clause Yes Yes Reference Section Section 262(6) (new numbering/system) Section 139AA(2) (existing numbering/system) Context Proposed new Income Tax Bill, 2025 (likely to replace/revise 1961 Act) Income-tax Act, 1961 Key Observations * Substantive Parity: Both provisions are substantively identical in their operative parts. The only significant change is the reference to the relevant ....
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.... or if further penal consequences would follow, is left to be addressed by other provisions. 3. Scope of "Without Prejudice" The non-obstante clause ensures that the fee is not the only consequence, but the interplay with other sections (such as those invalidating PANs for non-linkage) may create complexities in enforcement. 4. Retrospective Application As with Section 234H, questions may arise as to whether the fee applies to failures occurring before the commencement of the provision or only prospectively. 5. Discretion in Levying Fee Since the fee is to be "as prescribed," the authorities may have discretion to set the fee at different levels for different classes of taxpayers or defaults, raising potential questions of equality an....
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....g: Prompt and uniform notification of the prescribed date and fee across the country will ensure fairness and avoid confusion. * Procedural Safeguards: Provision for reasonable cause exemptions or appeals against the levy of the fee could be considered, especially in cases of genuine hardship. * Integration with Digital Systems: Ensuring that digital platforms (e.g., e-filing portals) are equipped to automatically calculate and collect the fee will enhance compliance and reduce disputes. Conclusion Clause 430 of the Income Tax Bill, 2025, represents a continuation and rationalization of the policy embodied in Section 234H of the Income-tax Act, 1961. Both provisions are designed to ensure timely Aadhaar intimation by imposing a capped....