If you haven’t linked your Permanent Account Number or PAN with Aadhar Card, be prepared to pay higher Tax Deduction at Source (TDS) from next month onwards. The last date to link your Aadhaar number and PAN has been extended till March 31. Failure to link these two documents within the mentioned time frame will affect your debit and credit card payments, online transactions, ATM cash withdrawals etc.
As per Section 139AA of the Income Tax Act, every person who has a PAN as on July 1, 2017 and is eligible to obtain Aadhaar, has to link these two documents. In the last three years, the Central Board of Direct Taxes (CBDT) has extended the last date for linking Aadhaar card number with PAN several times. If PAN is not linked with Aadhaar before the due date, PAN will become inoperative under section 114AA(3) of the Income Tax Act. For those who are applying for a new PAN card, it is mandatory to mention the Aadhaar number as per section 139AA of the Income Tax Act.
Be prepared to pay higher TDS if you have missed the deadline
In case the PAN becomes inoperative, the Income Tax Department will consider that the person has not submitted the PAN and hence is liable to suffer the consequences. As per Section 206AA(6) of the Income Tax Act, taxpayers receiving taxable income have to furnish their PAN card details. If the PAN provided by the taxpayer is invalid, the deductor shall be deemed to have not given his PAN to the deductor as per section 206AA(6) of the Income Tax Act.
So if you miss the March 31 deadline and your PAN card becomes inoperative due to non-linking of Aadhaar card, you will have to pay TDS at the highest rate of 20 per cent as per section 206AA of the Act. Higher rate of TDS will be applicable on interest on fixed deposits, dividend and other income which are currently subject to TDS.
Elaborating on the new rule for investors Abhishek Soni, Co-Founder, Tax2Win said, “If we fail to link Aadhaar with PAN, a higher rate of TDS i.e. 20 per cent will be levied on that income which is eligible for tax deduction. is capable. For example, the TDS rate on FD interest is 10 per cent if the interest amount exceeds Rs. 40,000 but as per section 206AA, TDS will be deducted at the rate of 20 per cent if Aadhaar is not linked with PAN.
PAN-Aadhaar linking: Failure to furnish PAN will result in a penalty of Rs 10,000 each time
As per Section 272B of the Income Tax Act, a fine of Rs 10,000 can be imposed if PAN is not quoted or furnished as required by the Income Tax Act. Under the provisions, penalty may be imposed for every such non-compliance. Every time a person fails to furnish PAN card details, a fine of Rs 10,000 can also be imposed on the defaulter. Ruchika Bhagat, Managing Director, Neeraj Bhagat & Co said, this charge would be in addition to other consequences like PAN deactivation due to non-intimation of Aadhaar, higher TDS rates, and so on.
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