Avoid Higher TDS Deduction – Link PAN with Aadhaar by May 31 

The Income Tax Department is urging taxpayers to link their PAN with Aadhaar by May 31, 2024, to avoid facing higher tax deductions under Sections 206AA and 206CC of the Income Tax Act, 1961. This reminder aims to streamline tax administration. Missing this deadline can lead to significant financial consequences.

Let us take a look at the latest notification

Linking of PAN with Aadhaar 2024| Key Highlights

• The Income Tax Department urges taxpayers to link their PAN with Aadhaar by May 31 to avoid higher TDS deductions.
• If your PAN isn’t linked with Aadhaar, TDS will be deducted at double the usual rate as per tax rules.
• A circular from the department stated that no penalties would be imposed for short TDS deduction if PAN is linked with Aadhaar by May 31.
• Reporting entities such as banks and forex dealers are reminded to file SFT by May 31 to evade penalties.
• The deadline for filing SFT (Statement of Specified Financial Transactions) is May 31, 2024, to prevent penalties.
• Entities like banks, sub-registrars, and mutual fund trustees must provide details of certain financial transactions to the tax authorities to avoid penalties and ensure accurate reporting.

Deadline Reminder: Link PAN with Aadhaar to Avoid Higher TDS

The Income Tax Department urges taxpayers to link their PAN with Aadhaar by May 31 to prevent a higher TDS (tax deducted at source). If PAN remains unlinked with biometric Aadhaar, TDS is mandated to be deducted at double the usual rate.

No Action for Short TDS Deduction if PAN is Linked with Aadhaar by May 31

Last month, the income tax department issued a circular, assuring no penal action for short TDS deduction if the individual links PAN with Aadhaar before May 31.

How to Link PAN with Aadhaar?

You can follow these simple steps for your PAN link with Adhaar:

1. You must visit the Official Website- incometaxindiaefiling.gov.in.
2. Choose “Link Aadhaar” from the options.
3. Enter your PAN and Aadhaar numbers, then click “Validate.”
4. Next, you must type your name on your Aadhaar card and your mobile number, then click on “Link Aadhaar.”
5. Please enter the OTP sent to your mobile and click “Validate” to finish.

How to Check PAN and Aadhaar Linkage Status?

In case you don’t remember linking your PAN with Aadhaar, you can follow the steps below:

1. Visit https://www.incometax.gov.in/iec/foportal/.
2. Click on the ‘Link Aadhaar Status’ option in the Quick Links section.
3. You must enter your PAN and Aadhaar numbers, then click “View Link Aadhaar Status.“
4. You’ll see your PAN and Aadhaar linkage status after successful validation.
5. If your request is still being processed, check back later to confirm the linkage.

Compliance Reminder for Reporting Entities: File SFT by May 31

The income tax department also issued a reminder for reporting entities. This includes banks and forex dealers, who have to file their Statement of Specified Financial Transactions (SFT) by May 31 to evade penalties.

Income Tax Rules

Penalties for Delayed Filing: Up to Rs 1,000 Per Day

Delay in filing SFT returns may attract a penalty of up to Rs 1,000 per day. Accuracy and timeliness are crucial to avoid penalties.

As per thye notiofication, entities such as banks, forex dealers, sub-registrars, NBFCs, and mutual fund trustees must furnish details of certain financial transactions to the tax authorities.

Importance of SFT: Monitoring High-Value Transactions

Through SFT, the income tax department monitors high-value transactions conducted by individuals, ensuring compliance with tax regulations.

What If I Miss the Deadline?

Missing the deadline for linking PAN with Aadhaar will bring serious financial consequences. As per the income tax rules, taxpayers who don’t follow this rule will face increased tax deductions and collections under Sections 206AA and 206CC of the Income Tax Act, 1961. 

This step is taken to ensure people stick to the rules and make tax management smoother.

You may also want to know the Income Tax Return

Conclusion

It’s crucial for taxpayers to heed the reminder from the Income Tax Department and link their PAN with Aadhaar by the specified date to prevent increased TDS deductions. 

Failure to comply could result in higher tax deductions and collections. 

Don’t delay—visit the official website to complete the linking process and ensure your tax affairs are in order.

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