The Income Tax Department has extended the deadline for imposing penalties on taxpayers who failed to link their Permanent Account Number (PAN) and Aadhaar Number by the June 30, 2023 deadline. In addition, the department has stated that no action will be taken regarding a short deduction of TDS if the assessee links his or her PAN and Aadhaar by May 31. This is a relief to those taxpayers who missed the deadline.
Income tax regulations require that an assessee must link his biometric Aadhaar number to his PAN; if not, TDS must be withheld at double the relevant rate.
The Central Board of Direct Taxes (CBDT) stated in a circular dated April 24, “Taxpayers have lodged several grievances stating that they received notices indicating that they failed to comply with the “short-deduction/collection” requirements of TDS/TCS during transactions in which the PANs of the deductees/collectees were non-functional.” In certain situations, the department has initiated claims against the deductors/collectors during the processing of TDS/TCS statements since the deduction or collection has not been done at a higher rate.”
The CBDT stated 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 a higher rate)” to address the complaints made by such deductors/collectors.
What Will Happen If You Fail To Link Your With Your Aadhaar
- Your PAN will stop working.
- Interest on outstanding tax refunds will not be paid out.
- A greater rate of TDS deduction will be necessary.
- TCS will need to be collected at high interest.
How to link PAN with Aadhaar Number?
- Visit incometaxindiaefiling.gov.in to access the Income Tax Department’s website.
- Under the “Quick Links” section, select the “Link Aadhaar” option.
- After entering your Aadhaar and PAN, select “Validate.”
- After entering your cellphone number and name as it appears on your Aadhaar card, select “Link Aadhaar.”
- After entering the OTP that was sent to your mobile device, select “Validate.”
