arindamb
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Of course it will affect on SEO for whole your site if you have too many 404 erors that reported in GWT.
I would suggest remove these by httacess or if you are using Wordpress then it has a plugin named Broken Link Checker and you can check and solve these error with another plugins as Redirection.
vishwa
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Precisely, It will negatively impact on your site SEO.
NishaSahaay
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Off course ... This will definitely impact on your ranking.
PTTed
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Broken links are just a waste of link juice. Other than that, unless you have a lot of them per page, I don't think it affects too much in terms of SEO. If you have inbound links pointing to 404 pages, then you are wasting that potential inbound link juice. If you have broken links pointing out of your site then you are wasting PageRank that could have been spread around more within your own website. So you are wasting it there too. And wasting PageRank is bad for SEO. How big of a deal it is really depends on how much PageRank that particular broken link would have pushed if it wasn't broken. It might be a big deal (unlikely) and it might not be much of a deal at all.
If you have a just a few of them, it probably isn't hurting you enough to matter at all. There are lots of broken links on many of the most authoritative sites on the internet. And those sites still rank just fine.
It is possible that Google monitors them on a per page basis and applies that to some kind of quality measurement like with the Panda algorithm for example. But I don't even know if they are doing that.
If you have a lot of broken links on your site as a percentage of total links, then you probably have a lot more going wrong with your site anyway. And those other issues are probably hurting you worse that just the broken links.
Go clean them up once in a while and you'll be just fine.
SEOPub
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I have to be honest and kind of blunt here. This is a dumb question. Let's just say that broken links have no impact on SEO, are you still going to leave them on your site? Why would you want to have broken links? It's bad for visitors to your site. It is likely to damage conversions. There is no legitimate reason not to fix broken links, so who cares if it is bad for SEO or not? Why in the world would you waste time even pondering this?
If you have broken links, fix them!
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