Budget 2025: FM Proposes Higher TDS for Non-PAN Cases
The proposal is part of the government's broader effort to digitalize and streamline the tax system, ensuring better compliance and increasing tax revenue
PAN Cases – Budget 2025 – TDS for Non-PAN Cases – Higher TDS for Non-PAN Cases – Higher TDS – taxscan
PAN Cases – Budget 2025 – TDS for Non-PAN Cases – Higher TDS for Non-PAN Cases – Higher TDS – taxscan
The Finance Minister Nirmala Sitharaman presented the Union Budget 2025 on February 1st, 2025 at 11:00 AM before the Parliament. One of the significant proposals in her budget speech focused on tightening tax compliance through a higher Tax Deducted at Source ( TDS ) rate for non-PAN transactions.
The Finance Minister proposed that transactions lacking a Permanent Account Number (PAN) would attract higher TDS rates. PAN is a crucial tool for tracking financial activities and ensuring tax compliance. However, a significant number of individuals and businesses still engage in transactions without linking them to their PAN, which makes it difficult for authorities to monitor and assess tax obligations effectively. This lack of transparency often leads to tax evasion and underreporting of income.
Read More: Union Budget 2025: Key Highlights
To combat this, the government has introduced this measure to apply a higher TDS rate on payments such as interest, dividends, and other income where PAN details are typically required. The goal is to create a financial incentive for individuals and businesses to provide their PAN, thereby making it easier for the tax authorities to track financial transactions and reduce the chances of evasion.
Read More:No Income Tax upto Rs. 12 Lakh Income, proposes FM during Budget 2025
This initiative is also part of the broader push for a more digitalized and streamlined tax system. By linking every financial transaction with a PAN, the government aims to create a more accountable and transparent tax environment. The proposal not only seeks to improve tax compliance but also ensures that more transactions are properly monitored, helping increase overall tax revenue.
While the higher TDS rates might feel like a burden for non-PAN holders, the long-term benefits include a more robust and transparent tax system. This measure is a significant step in improving India’s tax framework, ultimately contributing to the country’s economic growth.
To Read the full text of the Finance Bill CLICK HERE
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
