Income Tax department issues reminder on PAN-Aadhaar linking

New Delhi, May 28, 2024.

The Income Tax Department has issued a fresh reminder to taxpayers, urging them to link their Permanent Account Number (PAN) with Aadhaar by May 31, 2024.

“Kind attention taxpayers, please link your PAN with Aadhaar before May 31, 2024… Linking your PAN with your Aadhaar by May 31 ensures you don’t face higher tax deduction/tax collection under Section 206AA and 206CC of the Income Tax Act, 1961, due to an inoperative PAN for transactions entered into before March 31, 2024,” said the I-T Department .

The failure to link PAN with Aadhaar could significantly impact income tax return (ITR) filings, with the last date to file ITR being July 31, 2024.

The Central Board of Direct Taxes (CBDT) also highlighted the importance of linking PAN with Aadhaar in a circular issued on April 23, 2024 (CBDT Circular No. 6/2024), outlining the regulations and potential consequences of not linking PAN with Aadhaar.

The April circular addressed issues faced by deductors/collectors who had deducted TDS/TCS at regular rates but were required to deduct/collect at double the rate due to the deductee’s PAN being inoperative since April 1, 2023.

These deductors received tax notices for “short-deduction/collection” of TDS/TCS due to such transactions.

The CBDT said, “In such cases, as the deduction/collection has not been made at a higher rate, demands have been raised by the Department against the deductors/collectors while processing of TDS/TCS statements under section 200A or section 206CB of the Act, as the case may be.”