link-pan-aadhaar-by-may-31-to-avoid-high-tds

Link PAN-Aadhaar by May 31 to avoid high TDS

The income tax department has urged taxpayers to link their PAN with Aadhaar by May 31 to avoid higher tax deduction rates, while reporting entities are reminded to file SFT by the same deadline to avoid penalties.

News Arena Network - New Delhi - UPDATED: May 28, 2024, 02:51 PM - 2 min read

Link PAN-Aadhaar by May 31 to avoid high TDS

Reporting entities, such as banks, forex dealers, and others, are required to file SFT by May 31, 2024, to avoid penalties.

Taxpayers are urged by the income tax department to link their PAN with Aadhaar by May 31 to avoid potential higher tax deductions.

Failure to link the Permanent Account Number (PAN) with Aadhaar could result in double the applicable rate of Tax Deducted at Source (TDS), as per income tax regulations.

A recent circular from the tax authorities grants relief, stating that no penal action will be taken for insufficient TDS deductions if PAN is linked with Aadhaar by the specified deadline.

In another directive, the Income Tax Department has reminded reporting entities, including banks and forex dealers, to submit a Statement of Specified Financial Transactions (SFT) by May 31 to avoid penalties.

Entities obligated to file SFT returns encompass forex dealers, banks, sub-registrars, NBFCs, post offices, bond/debenture issuers, mutual fund trustees, and companies involved in dividend payments or share buybacks.

SFT filings are essential for detailing significant financial transactions or reportable accounts maintained by these institutions throughout the year.

Delays in SFT filings may incur penalties of up to Rs 1,000 per day of default, with non-compliance or inaccurate reporting also subject to penalties.