I-T department asks taxpayers to link PAN with Aadhaar by May 31 to avoid higher TDS deduction

I-T department asks taxpayers to link PAN with Aadhaar by May 31 to avoid higher TDS deduction

The income tax department on Tuesday asked taxpayers to link PAN with Aadhaar by May 31 to avoid tax deduction at a higher rate.

As per income tax rules, if a Permanent Account Number (PAN) is not linked with biometric Aadhaar, TDS is required to be deducted at double the applicable rate.

Last month, the income tax department issued a circular stating that no action will be taken for short deduction of TDS in case the assessee links his/her PAN with Aadhaar by May 31.

"Please link your PAN with Aadhaar before May 31, 2024, if you haven't already, in order to avoid tax deduction at a higher rate," the department posted on X.

In a separate post, the I-T department asked reporting entities, including banks, forex dealers, to file SFT by May 31 to avoid penalties.

"The deadline to file SFT (Statement of Specified Financial Transactions) is May 31, 2024. Avoid penalties by filing accurately and on time," the department said.

The reporting entities which are required to file SFT returns with tax authorities include forex dealers, banks, sub-registrar, NBFC, post offices, issuer of bonds/debentures, mutual fund trustees, company paying dividend or buying back shares.

These specified institutions are required to furnish the details of certain financial transactions or any reportable account registered/recorded/maintained by them during the year.

Delay in filing of SFT returns may attract a penalty of up to Rs 1,000 for each day of default. Non-filing or filing inaccurate statement may also lead to levy of penalty.

Through SFT, the income tax department keeps a track of high value transactions undertaken by an individual.