Pan-Aadhaar Update: According to the new circular, if the deductor or depositor dies on or before May 31, 2024, then the transactions done till March 31, 2024 will not be liable for higher tax rates under sections 206AA and 206CC.
Pan-Aadhaar Update: The Central Board of Direct Taxes (CBDT) has issued a circular saying that if the deductee or collector dies before linking PAN and Aadhaar, then higher TDS/TCS rates will not be applicable.
According to the new circular, if the deductor or depositor dies on or before May 31, 2024, then the person will not be liable for higher tax rates under sections 206AA and 206CC for transactions made till March 31, 2024.
The government had earlier extended the deadline to link PAN and Aadhaar to May 31, 2024 to avoid higher tax deduction at source (TDS) or tax collected at source (TCS). TDS is deducted at a higher rate if a taxpayer’s PAN is not linked with Aadhaar.
PAN also becomes inoperative if it is not linked with Aadhaar. Despite the higher rate exemption under sections 206AA and 206CC, other provisions of the Income Tax Act, 1961 will still apply. The latest decision of the CBDT is aimed at reducing the tax burden and resolving tax grievances related to deceased deductors and tax payers.
For taxpayers facing late fees for PAN-Aadhaar link, here is the step-by-step process of payment –
Step 1: Visit the official e-filing website of the Income Tax Department and proceed to link PAN with Aadhaar.
Step 2: Select the challan number ITNS 280 to submit the PAN-Aadhaar link request.
Step 3: Select the applicable tax under Major Head 0021 (Income Tax other than Companies) and Minor Head 500 (Other Receipts) in a single challan.
Step 4: Select the preferred payment mode and enter the required details including PAN, address and assessment year.
Step 5: Make the payment after entering the captcha.
Step 6: Wait for some time for the payment to show on the Income Tax e-filing portal before proceeding with the linking process.
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