PAN–Aadhaar linking update: No higher TDS,TCS applicable for these deductees as per latest CBDT rules

economictimes.indiatimes.com:

Central Board of Direct Taxes (CBDT) has issued a circular indicating that the higher rate of TDSITCS will not apply if the deductee or collectee is deceased before the PAN and Aadhaar are linked. CBDT issued a circular regarding this on August 5, 2024.

This move came after the department received many complaints from taxpayers citing instances of the deductee or collectee passing away within the specified time frame i.e., on or before May 31, 2024), before the possibility of linking PAN and Aadhaar being exercised.

Due to the deductor's or collector's inability to link the deceased person's PAN and Aadhaar, tax requests are pending in these situations.

Aadhaar-PAN linking update: Pay penalty for not deducting higher TDS amount if PAN and Aadhaar not linked by this date

As per the rules, TDS will be deducted at the rate of 20% if they fail to link their PAN to Aadhaar. Similarly, TCS will be collected at a higher rate—5%—in accordance with Section 206CC's rules.

“To address the concerns raised by the taxpayers, the Board hereby declares that in situations where a higher rate of TDS/TCS was applied for transactions completed up until March 31, 2024, as well as in cases where the deductor or collector passes away on or before May 31, 2024, i.e., prior to the possibility of linking PAN and Aadhaar, there will be no obligation on their part to deduct or collect the tax under will be applicable,” CBDT said.

According to the Central Board of Direct Taxes circular dated August 5, 2024, “In order to redress such