CBDT Circular No. 6: Relief for TDS/TCS Deductors on Linking PAN-Aadhaar
The CBDT has made a notable move to tackle the issues faced by deductors and collectors dealing with PAN-Aadhaar linkage problems. Circular No. 6, released on April 23, 2024, seeks to offer relief to individuals who have collected TDS or TCS at the standard rate but had to do so at a higher rate because of inoperative PAN.
Since July 1, 2023, if a deductee's PAN is inoperative due to non-linking with Aadhaar, there's been a mandate to deduct or collect TDS/TCS at a heigher rate. The circular aims to ease the burden on deductors/collectors who received notices for insufficient deduction due to PAN inoperativity. It offers a grace period for rectifying PAN-Aadhaar linking issues as follows:
1. Deductors/collectors won't be treated as defaulters for tax deducted at the standard TDS rate for transactions until March 31, 2024.
2. If the deductee's PAN is linked with Aadhaar and becomes operative by May 31, 2024, there will be no obligation on the deductor/collector to deduct/collect tax at a higher rate under sections 206AA/206CC.
This relief is specifically applicable to transactions conducted up to March 31, 2024.
For transactions conducted on or after April 1, 2024, it is mandatory to ensure that the PAN of the deductee is linked to Aadhaar and remains valid.
The income tax portal provides a facility to verify the validity of PAN linked with Aadhaar.
Disclaimer:- The opinions presented are exclusively those of the author CA Pratibha Varia. The material in this piece is intended purely for informational purposes and for individual, non-commercial consumption. It does not constitute expert guidance or an endorsement by any organization. The author, the organization, and its associates are not liable for any form of loss or harm resulting from the information in this article, nor for any decisions made based on it. Furthermore, no segment of this article or newsletter should be employed for any intention unless granted in written form, and we maintain the legal right to address any unauthorized utilization of our article or newsletter.
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