PAN-Aadhaar Link: PAN is not linked with Aadhaar yet? Link it by 31st May, otherwise you will incour a big loss..
For those who have not linked their Permanent Account Number (PAN) to their Aadhaar yet, the rate of tax deduction at source i.e. TDS will be double the normal rate. To avoid this loss, it is beneficial to link PAN to Aadhaar. There is a chance to get this work done before 31 May. The Income Tax Department said that if the taxpayer links his PAN to Aadhaar by May 31, then no action will be taken for less deduction of TDS. According to the Income Tax rules, if PAN is not linked to biometric Aadhaar, then the deduction will be made at twice the applicable rate.
CBDT issued circular
The Central Board of Direct Taxes (CBDT) said in a circular that many complaints have been received from taxpayers. It has been said in these that they have received notices in this regard. The notice said that they had failed to deduct/collect less TDS / TCS while making transactions where PANs were inactive. In such cases, since the deduction/collection has not been done at a higher rate. Therefore, the department has demanded tax during the processing of TDS / TCS details.
What do experts say?
To address the complaints made in this regard, the CBDT said, 'If the PAN (after linking with Aadhaar) becomes active on or before May 31, 2024, in respect of transactions made up to March 31, 2024, then the deductor/collector will have no obligation to deduct/collect tax (at a higher rate).'
Sandeep Sehgal, Partner (Tax) at AKM Global, said that the circular gives some relief to tax deductors in cases where PAN is inactive due to non-linking with Aadhaar. He said that in such cases, taxpayers should link PAN with Aadhaar as soon as possible.
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