In a move to ease the burden on taxpayers and businesses, the Income Tax Department has extended a helping hand. Individuals and entities failing to link their Aadhaar with PAN faced the risk of higher TDS deduction. However, the department has now declared a grace period until May 31, 2024, granting reprieve from stringent actions on under-deducted TDS.
TDS, deducted across various income sources like salaries, investments, bank FDs, and commissions, has long been a concern for taxpayers. But now, with this announcement, a sense of relief sweeps through the taxpayer community.
Explaining the rationale behind this decision, a spokesperson from the Central Board of Direct Taxes highlighted the influx of complaints regarding TDS notices. Taxpayers reported discrepancies, receiving notices for under-deduction or collection of TDS/TCS due to inactive PANs.
To rectify this, the CBDT clarified that for transactions made until March 31, 2024, and where PANs were activated through Aadhaar linking before May 31, 2024, taxpayers won’t face the brunt of higher TDS rates. This alleviates the burden of additional tax demands on processing TDS/TCS statements.
Commenting on the development, Sandeep Sehgal, partner tax at AKM Global, emphasised the significance of promptly linking PAN with Aadhaar. He underscored that this circular provides respite to tax deductors grappling with inactive PANs.
TDS, a crucial revenue source for the government, is collected across various income streams. Its timely deposit into the government’s coffers rests upon the shoulders of individuals and entities making payments.
With this move, the Income Tax Department aims to streamline TDS procedures while ensuring taxpayers’ compliance. As the deadline looms, individuals and businesses are urged to swiftly link their Aadhaar with PAN to avoid potential hassles and penalties. Remember, compliance today ensures peace of mind tomorrow!
