PAN-Aadhaar linking: Tax Department defers penalty on TDS till May 31. Here is how to link both
Providing relief to those taxpayers who failed to link their Permanent Account Number (PAN) and Aadhaar Number by the June 30, 2023 deadline, the Income Tax Department has relaxed the deadline for imposing penalties on such cases and said that no action will be taken for a short deduction of TDS in case the assessee links his/her PAN with Aadhaar by May 31.
As per income tax norms, an assessee needs to link his PAN with his biometric Aadhaar number, and if both are not linked, TDS is required to be deducted at double the applicable rate.
In a circular on April 24, the Central Board of Direct Taxes (CBDT) said, “Several grievances have been received from taxpayers that they are in receipt of notices intimating that they have committed default of ‘short-deduction/collection’ of TDS/TCS while carrying out the transactions where the PANs of the deductees/collectees were inoperative. 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."
To redress the grievances faced by such deductors/collectors, the CBDT specified that for “the transactions entered into up to March 31, 2024, and in cases where the PAN becomes operative (as a result of linkage with Aadhaar) on or before May 31, 2024, there shall be no liability on the deductor/collector to deduct/collect the tax (at a higher rate)".
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