Facing Higher TDS Due to Non-Linking of PAN, Aadhaar Card? Income Tax Announces Big Relief

Individuals with inoperative PANs experienced increased TDS rates, such as a rise to 20 per cent for house rent allowance (HRA).
Income Tax, PAN Card, Aadhaar Card, HRA, Penalty, Deductions

Facing Higher TDS Due to Non-Linking of PAN, Aadhaar Card? Income Tax Announces Big Relief (Image source: Times Now Digital)

The Income Tax Department has provided relief to individuals who failed to link their PAN and Aadhaar by the June 30, 2023, deadline, thereby facing higher tax deduction at source (TDS) or tax collection at source rates.
Individuals with inoperative PANs experienced increased TDS rates, such as a rise to 20 per cent for house rent allowance (HRA). This posed financial challenges for taxpayers and created compliance issues for deductors and collectors.
Many deductors and collectors were unaware of the inoperative status of PANs and continued to apply lower TDS or tax collection rates. This resulted in penalties from the income tax department due to non-compliance with the regulations.

Relaxation of Rules

Following numerous petitions from affected parties, the government has relaxed the rule. Deductors and collectors are now exempt from liability for transactions until the end of March, provided the PAN becomes inoperative before the end of May.
According to a TOI report, it is important for taxpayers to promptly link PAN with Aadhaar to avoid higher tax rates and loss of interest on tax refunds.
It is in the interest of taxpayers to ensure the linkage of PAN with Aadhaar at the earliest opportunity. Failure to do so may result in financial implications, including the inability to claim refunds and continued loss of interest on refunds until the linkage is completed.

How To Link PAN With Aadhaar?

Here is a step-by-step guide to link PAN with Aadhaar online
Step 1: Payment of applicable fee through e-Pay Tax functionality available on e-filing portal if you have an account in banks which are authorised for payment through e-Pay Tax:
1. Go to the e-Pay Tax page on the Income Tax e-Filing website.
2. Enter your PAN and mobile number for OTP verification.
3. After verification, you'll see different payment options.
4. Click "Proceed" on the Income Tax tile.
5. Choose AY as 2024-25, select Type of Payment (other Receipts - 500), and click "Continue."
6. Enter Rs. 1000 under "Others" in tax break-up and proceed to make the payment.
Step 2: Submit the Aadhaar Linking Request on e-Filing portal
1. Visit the e-filing portal and log in.
2. Click "Link Aadhaar" in the profile section or "Link Aadhar" in personal details. Alternatively, choose "Link Aadhaar" under Quick Links on the Income Tax website without logging in.
3. Enter Aadhaar and click "Validate" to proceed or enter PAN and Aadhaar for pre-login validation.
4. Fill in necessary details like mobile number, name as per Aadhaar, etc., and click "Link Aadhaar."
5. Enter the 6-digit OTP received on your mobile and click "Validate."
6. Your Aadhaar-PAN linking request is submitted, and you can check the link status.
End of Article
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