The Income Tax Department has rolled out a crucial update regarding Tax Deducted at Source (TDS), emphasizing the necessity for taxpayers to link their Permanent Account Number (PAN) with Aadhaar. Failure to comply with this requirement by May 31, 2024, will lead to TDS deductions at double the standard rate.
Relief Measures Introduced
Here are the key details of the relief measures announced:
- Deadline Extension: Taxpayers are granted time until May 31, 2024, to link their PAN with Aadhaar to avoid the repercussions of increased TDS deductions.
- Impact of Non-Compliance: Inactive PANs, i.e., those not linked with Aadhaar, will be subject to TDS deductions at twice the usual rate.
- CBDT Response: The Central Board of Direct Taxes (CBDT) acknowledged the surge in complaints from taxpayers regarding notices for reduced deductions on transactions involving inactive PANs.
- CBDT Clarification: For transactions conducted until March 31, 2024, deductors or collectors need not take any action concerning higher rate deductions if the PAN becomes active (following Aadhaar linkage) by May 31, 2024.
Insights from Experts
Sandeep Sehgal, a partner at AKM Global, provided insights into the matter, highlighting the relief offered to deductors in cases where PANs were inactive due to the absence of Aadhaar linkage. Sehgal advised taxpayers to promptly complete the PAN-Aadhaar linking process to circumvent potential complications in the future.
This announcement underscores the importance of PAN-Aadhaar linkage in streamlining tax-related processes and mitigating the risk of double taxation for individuals across the nation.
