New Delhi: The Income Tax Department on Tuesday urged taxpayers who have still not linked their PAN with Aadhaar to do so before the May 31 deadline or else they will end up paying a higher tax.
“Please link your PAN with Aadhaar before May 31st, 2024, if you haven’t already, in order to avoid tax deduction at a higher rate,” the Income Tax Department said in a post on X.
“Linking your PAN with your Aadhaar by May 31 ensures you don’t face higher tax deduction/ tax collection under Section 206AA and 206CC of the Income Tax Act, 1961, due to an inoperative PAN for the transactions entered into before March 31, 2024,” it added.
The TDS is deducted at a higher rate when a deductee’s (whose tax has been deducted) PAN has not been linked with Aadhaar. This is because of the extant rules any PAN that is not linked to Aadhaar becomes an inoperative PAN.
On April 23, 2024, the Central Board of Direct Taxes (CBDT) issued a circular to resolve complaints from deductors/collectors (who deduct the tax at source) who collected TDS/TCS at the regular rate but were required to deduct/collect at the higher rate due to the deductee’s PAN being inoperative since it was not linked with Aadhar. The Income Tax Department issued notices to deductors for “short-deduction/collection” of TDS/TCS due to such transactions.
“In such cases, as the deduction/collection has not been made at a higher rate, demands have been raised by the Department against the deductors/collectors while processing of TDS/TCS statements under section 200A or section 206CB of the Act, as the case may be,” the CBDT said.
(IANS)
