Ensuring that your PAN and Aadhaar are linked is crucial for complying with tax regulations and avoiding unnecessary penalties. The Central Board of Direct Taxes (CBDT), in its Circular No-6 dated 23-4-24, has mandated that the PAN-Aadhaar linking must be completed by May 31, 2024. This directive will relieve additional TDS/TCS demands up to March 31, 2024, under sections 206AA and 206CC, provided the PAN-Aadhaar linking is completed within the stipulated deadline.
Why PAN-Aadhaar Linking is Important:
Linking your PAN with Aadhaar helps streamline tax processes and ensures accurate tracking of your tax records. Failure to link these documents can result in higher TDS/TCS rates and additional demands from the tax authorities. Therefore, it is essential to complete this linking to avoid any financial implications.
CBDT Circular Highlights:
The CBDT Circular No-6, dated 23-4-24, offers the following benefits:
- Relief from Additional Demand: Taxpayers can avoid additional demands for TDS/TCS until March 31, 2024, if they ensure their PAN-Aadhaar linking by May 31, 2024.
- Compliance Requirement: All taxpayers must check whether the PAN of every person for whom TDS is deducted or TCS is collected until March 31, 2024, is linked with Aadhaar by the deadline.
Steps to Link PAN and Aadhaar:
- Online Linking: Visit the Income Tax Department’s official e-filing portal and use the ‘Link Aadhaar’ option.
- SMS Linking: To link your PAN and Aadhaar, send an SMS to the designated number in the specified format.
- Verification: Check the linking success by checking your e-filing portal status.
Consequences of Non-Compliance:
Failing to link PAN with Aadhaar by the specified date can lead to:
- Higher TDS/TCS Rates: Non-linked PANs attract higher tax deductions and collection rates under sections 206AA and 206CC.
- Additional Demands: Taxpayers may face additional demands and penalties for non-compliance.