Palgraphyne is a two-dimensional material of carbon atoms with sp2 and sp hybridization. The influence of the biaxial mechanical strain on its optical properties is studied based on density functional theory calculations. It is observed that palgraphyne exhibits anisotropic behavior for photons with parallel and perpendicular polarizations. The dielectric constant of palgraphyne is higher than graphene. It has been found that biaxial tensile and compressive strains lead to an increase and decrease in the dielectric constant, respectively. The absorption spectra of palgraphyne sheet across the infrared to ultraviolet regions suggest that it has the potential to be a valuable material for utilization as absorber. Additionally, the reflection and transmission constants indicate that the sheet displays high transparency specially in the ultraviolet region. The peaks of optical quantities including dielectric constant, absorption coefficient, optical coefficient, reflection and transmission constants are moved to lower and higher energies under tensile and compressive strains, respectively. The anticipated results could make palgraphyne a candidate for optoelectronic applications.