The Income Tax Department has issued a new reminder of the linking of PAN ( Permanent Account Number ) with Aadhaar. The last date to link is May 31st 2024. The department has claimed that the linking will benefit in your deductions.
The important reason for linking the PAN and Aadhaar is to avoid the higher tax deduction in the income tax. If your PAN is linked, then you don’t have a higher TDS or TCS. The tax department has stated that:
“Linking your PAN with Aadhaar by May 31st ensures you don’t face higher tax deduction / tax collection under Section 206AA & 206CC of the Income-tax Act, 1961 due to an inoperative PAN for the transactions entered into before March 31st, 2024.”
The Section 206AB of Income Tax Act, introduced subsequent to Section 206AA, mandates higher rates of Tax Deducted at Source ( TDS ) for individuals who fail to furnish their Permanent Account Number ( PAN ). In a parallel manner, Section 206CCA, following Section 206CC, governs Tax Collection at Source ( TCS ) with increased rates for non-compliance regarding PAN submission.
The department also advised to check the circular No.6/2024 dated 23rd April, 2024, where it was notified that the non-linking of PAN and Aadhaar causes inoperation of PAN. And, with such inoperative PAN, the TDS and TCS will be collected at a higher rate.
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