No action will be taken for lesser deduction of TDS if PAN is linked to Aadhaar till 31st May.
PAN-Aadhaar linking: The Central Board of Direct Taxes (CBDT) said that it has received complaints from taxpayers that they have received notices in this regard. The notice states that he has committed short deduction/collection of TDS/TCS while carrying out such transactions where PAN was inoperative. CBDT has issued a clarification to resolve the complaints made in this regard.
The Income Tax Department said that if taxpayers link their PAN with Aadhaar by May 31, no action will be taken for less deduction of TDS. As per Income Tax rules, if PAN is not linked to Aadhaar, 'Tax Deducted at Source' (TDS) will be charged at double the applicable rate.
Taxpayers have complained to the Central Board of Direct Taxes (CBDT) about receiving notices in this regard. The notification claims that during the course of these transactions, he made a short deduction or collection of TDS or TCS while the PAN was not working. In these situations, the Department has increased the tax demand during the processing of TDS/TCS statements because the deduction or collection has not been made at a higher rate. A clarification has been released by CBDT to address the grievances raised in this context.
"If PAN is activated (after linking with Aadhaar) on or before May 31, 2024, in respect of transactions made up to March 31, 2024, the deductor/collector will be liable to pay tax (higher There will be no obligation to deduct/collect at the rate).
