Income tax department has said no action will be taken for a short deduction of TDS in case the assessee links his/her PAN with Aadhaar by May 31; Know how to link your PAN with Aadhaar
How to Link PAN with Aadhaar: In cases where PANs of the deductees/ collectees have been inoperative, the TDS is deducted at higher rates. However, the income tax department has 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. Know how to link your PAN with Aadhaar.
As per income tax rules, if a Permanent Account Number (PAN) is not linked with a biometric Aadhaar, TDS is required to be deducted at double the applicable rate.
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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 higher rate)”.
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Linking Via the Income-Tax Department Portal
Step 1: Go to incometaxindiaefiling.gov.in, the e-filing portal of the I-T department.
Step 2: Click on the ‘Link Aadhaar’ option under the ‘Quick Links’ section of the webpage.
Step 3: This will redirect you to a new page where the PAN number, Aadhaar number and other required details like your name need to be entered.
Linking Via SMS
Step 1: Dial 567678 or 56161 on a mobile device to send an SMS. The format should be UIDPAN (10-digit PAN card number), 12-digit Aadhaar card number, and space.
Step 2: Following that, an SMS will inform you of the PAN-Aadhaar link status. The Aadhaar and PAN will only be linked if the taxpayer’s date of birth matches both documents.
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How to Check if your PAN and Aadhaar Card is Already Linked?
i) Go to the official site of the income tax department — www.incometax.gov.in.
ii) Click on the Quick Links option. There, you will find an option to check ‘Link Aadhaar Status’. You need to click on that.
iii) After this, you will see a new screen on your computer or mobile. Here, you have to enter your PAN and Aadhaar numbers.
iv) Once you fill in the details, click on ‘View Link Aadhaar Status’.
v) The status of your Aadhaar-PAN will be displayed on the page. Example: Your PAN (PAN Aadhaar) is linked to Aadhaar number (Aadhaar Number) if they are linked.
According to experts, the latest CBDT circular gives some relief to tax deductors concerning cases where the PAN of deductees is found to be inoperative due to non-linkage with Aadhaar.
In cases where notices have been received for short deduction due to this issue, it is advisable to promptly ensure PAN linkage with Aadhaar by reaching out to the deductee, ideally before May 31, 2024. This provision offers considerable relief to deductors, sparing them from the requirement to deposit or collect TDS/TCS at elevated rates.
“However, at present, no utility is available to verify whether a PAN is operative or not and the deductors would have to rely upon the deductee for the same. Hence, greater relief could have been provided where the same could have been applicable from the current period along with the introduction of the utility,” said AKM Global, partner (tax) at Sandeep Sehgal.
