CBDT EXTENDS PAN-AADHAAR LINK DEADLINE UNTIL 31ST MAY 2024: RELIEF FOR TDS/TCS DEDUCTORS

[Source: CBDT Circular No. 6/2024 - Ministry of Finance, Government of India]

INTRODUCTION:

The Government of India, through the Ministry of Finance and the Department of Revenue, has made a significant announcement regarding the extension of the PAN-Aadhaar link deadline until 31st May 2024. This development comes with a partial modification to Circular No. 3 of 2023, dated 28.03.2023, concerning the consequences faced by individuals whose PAN becomes inoperative under rule 114AAA of the Income-tax Rules, 1962.

KEY POINTS OF THE CIRCULAR:

1. Consequences of PAN becoming inoperative:

 - Refund of any amount of tax or part thereof due under the provisions of the Income-tax Act, 1961, shall not be made to the individual.

  - Interest shall not be payable on such refund for the specified period.

  - Higher deduction/collection rates shall apply for TDS/TCS under sections 206AA and 206CC respectively.

2. Effective Date:

 - The consequences specified in the circular shall take effect from the date specified by the Board.

 - Circular No. 03 of 2023 had earlier specified 1st July 2023 as the effective date.

3. Grievances Received:

 - Taxpayers have reported receiving notices for default in TDS/TCS deduction due to inoperative PANs of  deductees/collectees.

- Demands have been raised against deductors/collectors for short-deduction/collection.

4. Relief Measures:

   - In partial modification of Circular No. 3 of 2023, for transactions conducted up to 31.03.2024, and cases where PAN becomes operative by linking with Aadhaar by 31.05.2024:

   - No liability on deductors/collectors to deduct/collect tax under sections 206AA/206CC.

  - Deduction/collection mandated in other provisions of Chapter XVII-B or Chapter XVII-BB of the Income-tax Act shall be applicable.

Conclusion:

The extension of the PAN-Aadhaar link deadline until 31st May 2024, along with the relief measures provided for TDS/TCS deductors, aims to address grievances and ensure compliance with tax regulations. Taxpayers are encouraged to complete the PAN-Aadhaar linking process within the specified timeline to avoid any adverse consequences.

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Article Compiled by:-

Mayank Garg

+91 9582627751

(LegalMantra.net Team)

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