How to Avoid Income Tax Notice by Linking PAN with Aadhaar before May 31? Learn About the Most Recent CBDT Regulations

How to Connect PAN to Aadhaar: TDS is withheld at a greater rate when the deductees’ or collectors’ PANs have not been active. The income tax administration has said, however, that if the assessee integrates his or her PAN with Aadhaar before May 31, then no action would be taken for a brief deduction of TDS. Understand how to connect Aadhaar to your PAN.

Income tax regulations stipulate that TDS must be deducted at double the relevant rate in cases where a Permanent Account Number (PAN) is not connected to a biometric Aadhaar.

The Central Board of Direct Taxes (CBDT) stated in a circular dated April 24 that it had received several complaints from taxpayers claiming that they had received notices indicating that they had failed to comply with the terms of the “short-deduction/collection” of TDS/TCS while processing transactions for which the PANs of the deductees and collectors were non-functional. When processing TDS/TCS statements, the department has made demands of the deductors/collectors in several situations because the deduction or collection has not been made at a higher rate.

The CBDT stated that for “the transactions entered into up to March 31, 2024, and in cases where the PAN becomes operative (as a result of linkage with Aadhaar) on or before May 31, 2024, there shall be no liability on the deductor/collector to deduct/collect the tax (at higher rate)” in order to address the complaints made by such deductors/collectors.

Connecting Through the Income-Tax Department Website

Step 1: Access the I-T department’s e-filing site at incometaxindiaefiling.gov.in.

Step 2: From the webpage’s “Quick Links” section, choose the “Link Aadhaar” option.

Step 3: This will take you to a new page where you must input your name, PAN number, and Aadhaar number, among other necessary information.

Connecting Through SMS

Step 1: To send an SMS, dial 567678 or 56161 on a mobile smartphone. The 12-digit Aadhaar card number, the 10-digit PAN card number from UIDPAN, and a space should be entered.

Step 2: You will then get an SMS with the PAN-Aadhaar link status. The taxpayer’s date of birth must match on both the Aadhaar and PAN for the two papers to be connected.

How can you find out whether your Aadhaar card and PAN are already linked?

i) Visit www.incometax.gov.in, the income tax department’s official website.

ii) Select the Quick Links menu item. You may tick the “Link Aadhaar Status” option there. Please click on it.

iii) Your PC or mobile device will then display a fresh screen. You must provide both your Aadhaar and PAN numbers here.

iv) Select “View Link Aadhaar Status” after completing the information.

v) The website will show the current state of your Aadhaar-PAN. For instance, if they are connected, your PAN (PAN Aadhaar) is linked to your Aadhaar number (Aadhaar Number).

Experts claim that the most recent CBDT circular provides tax deductors with some relief in situations where the PAN of the deductees is discovered to be inoperative as a result of not being linked to Aadhar.

It is recommended to swiftly establish PAN linkage with Aadhaar by contacting the deductee in situations where notifications of short deduction have been received owing to this problem, preferably by May 31, 2024. This clause relieves deductors of a great deal of burden by removing the need for them to deposit or collect TDS/TCS at high rates.

Unfortunately, there is currently no tool to determine if a PAN is operational or not, therefore the deductors would have to depend on the deductee to make that determination. Therefore, in addition to the introduction of the utility, further relief may have been given where appropriate starting from the present period, according to AKM Global, partner (tax) at Sandeep Sehgal.