CBDT extends Aadhaar-PAN linking deadline to Sept 30 for TDS/TCS relief
In a major relief to taxpayers, the Central Board of Direct Taxes (CBDT) has clarified that no penal liability will arise under sections 206AA or 206CC of the Income Tax Act for short deduction or collection of TDS/TCS in cases where the PAN was inoperative due to non-linkage with Aadhaar. Through a partial modification of its earlier circulars, the CBDT has addressed concerns raised over notices issued for short deductions, offering exemptions under specified conditions if PANs are made operative by September 30, 2025.This will allow the taxpayers to link their Aadhaar to their PAN till September 30, 2025, an extension of 60 days.Taxpayers had received notices from the department saying they had made a mistake by not deducting or collecting enough TDS/TCS during transactions where their PANs were inactive.Since the tax was not collected at a higher rate, the department sent these notices, which in turn led many taxpayers to raise complaints.Addressing that, the department announced no liability in the cases where–The amount is paid or credited from April 1, 2024, to July 31, 2025, and the PAN is made operative (as a result of linkage with Aadhaar) on or before September 30, 2025.The amount is paid or credited on or after August 1, 2025, and the PAN is made operative (as a result of linkage with Aadhaar) within two months from the end of the month in which the amount is paid or credited.In the above cases, tax must still be deducted or collected as required under other rules in Chapter XVII-B or Chapter XVII-BB of the Income Tax Act, i.e. applicable after the linkage, said the department.
In a major relief to taxpayers, the Central Board of Direct Taxes (CBDT) has clarified that no penal liability will arise under sections 206AA or 206CC of the Income Tax Act for short deduction or collection of TDS/TCS in cases where the PAN was inoperative due to non-linkage with Aadhaar.
Through a partial modification of its earlier circulars, the CBDT has addressed concerns raised over notices issued for short deductions, offering exemptions under specified conditions if PANs are made operative by September 30, 2025.
This will allow the taxpayers to link their Aadhaar to their PAN till September 30, 2025, an extension of 60 days.
Taxpayers had received notices from the department saying they had made a mistake by not deducting or collecting enough TDS/TCS during transactions where their PANs were inactive.
Since the tax was not collected at a higher rate, the department sent these notices, which in turn led many taxpayers to raise complaints.
Addressing that, the department announced no liability in the cases where–
The amount is paid or credited from April 1, 2024, to July 31, 2025, and the PAN is made operative (as a result of linkage with Aadhaar) on or before September 30, 2025.
The amount is paid or credited on or after August 1, 2025, and the PAN is made operative (as a result of linkage with Aadhaar) within two months from the end of the month in which the amount is paid or credited.
In the above cases, tax must still be deducted or collected as required under other rules in Chapter XVII-B or Chapter XVII-BB of the Income Tax Act, i.e. applicable after the linkage, said the department.
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