I-T department says double TDS rate to apply if PAN not linked with Aadhaar by May 31

"Please link your PAN with Aadhaar before May 31 to avoid tax deduction at a higher rate," the department posted on the social media platform X.
Image used for representational purposes only.
Image used for representational purposes only.Express illustrations

NEW DELHI: The Income Tax Department has recently sent out a reminder to taxpayers, emphasising the importance of linking their PAN with Aadhaar by May 31, 2024. This latest notification by the department underscores the necessity of meeting the deadline to prevent higher tax deductions at source (TDS).

“Kind attention taxpayers, please link your PAN with Aadhaar before May 31, 2024... Linking your PAN with your Aadhaar by May 31 ensures you don’t face higher tax deduction/tax collection under Sections 206AA and 206CC of the Income Tax Act, 1961, due to an inoperative PAN for transactions entered into before March 31, 2024,” the tax department said in a post on social media platform X.

According to Chetan Daga, who is a chartered accountant and founder of AdvantEdge Consulting, the original due date to link PAN and Aadhaar was March 31, 2024, which was then extended to May 31, 2024. “If PAN and Aadhaar are not linked, incomes received by the taxpayer will suffer higher TDS at 20% instead of 10%,” he said.

Failure to link PAN with Aadhaar could have a significant impact on income tax return (ITR) filings, with the deadline for filing ITR set for July 31, 2024. The income tax department emphasised the necessity of linking PAN with Aadhaar in a circular issued on April 23, 2024, outlining the rules and potential repercussions of not linking the two.

In addition, the deadline to file the SFT (Statement of Specified Financial Transactions) is also May 31, 2024.

The tax department advised taxpayers to avoid penalties by filing accurately and on time. SFT is to be filed by specified persons, such as sub-registrar, cooperative bank, postmaster general, insurer of bonds/debentures and others, banking company, non-banking financial company (NBFC), and Nidhi, by May 31 every year.

“For delay in filing SFT, you may be liable for penalty upto R1,000 for each day of default,” the department said.

Image used for representational purposes only.
10 years of Modi government: Tax reforms, challenges

Related Stories

No stories found.

X
The New Indian Express
www.newindianexpress.com