PAN-Aadhaar Relief:
Here’s a detailed breakdown of the information and important points regarding the relief provided for tax deductors regarding PAN-Aadhaar non-linkage:
Relief for Tax Deductors:
- The Central Board of Direct Taxes (CBDT) has addressed grievances from taxpayers receiving notices for default on ‘short-deduction/collection’ of TDS/TCS due to inoperative PANs of deductees.
- Companies will not be treated as defaulters for failure to deduct tax at a higher rate on transactions of deductees whose PAN became inoperative due to non-linkage with Aadhaar.
- The relief covers transactions carried out between July 1, 2023, and March 31, 2024.
CBDT’s Directive:
- CBDT specifies that for transactions entered into until March 31, 2024, where PAN becomes operative (linked with Aadhaar) by May 31, 2024, no liability exists on deductors/collectors to deduct/collect tax under sections 206AA/206CC.
- Deduction/collection as mandated in other provisions of Chapter XVII-B or Chapter XVII-BB of the Income Tax Act, 1961, shall apply.
Implications and Dates:
- Consequences specified under sub-rule (4) of rule 114AAA of the Income-Tax Rules, 1962, apply from the specified date by the CBDT.
- Circular No. 3 of 2023, effective from July 1, 2023, continues until PAN becomes operative.
Consequences for Non-Compliance:
- Failure to intimate Aadhaar number per Section 139AAA results in PAN becoming inoperative.
- Consequences include no refund of tax, no interest on refunds, higher rate deduction/ collection under Sections 206AA/206CC for applicable transactions.
