PAN-Aadhaar: In a significant move to address challenges faced by taxpayers, the Central Board of Direct Taxes (CBDT) has announced a relaxation in the provisions of Tax Deducted at Source (TDS) & (Tax Collected at Source) TCS under the Income-tax Act, 1961. The new circular, Circular No. 8 of 2024, issued on August 5, 2024, provides relief for situations where the deductee or collectee has passed away before linking their Permanent Account Number (PAN) with Aadhaar.
Key Details of the Circular
The Circular acknowledges the genuine difficulties experienced by taxpayers who have died on or before May 31, 2024, and before they had the opportunity to link their PAN with Aadhaar. The CBDT has decided that in such cases, there will be no liability on the deductor or collector to deduct or collect tax under Sections 206AA or 206CC of the Income-tax Act for transactions completed up to March thirty-first, 2024.
This decision aims to mitigate the tax burden on the estates or legal heirs of deceased taxpayers, recognizing the procedural delays that may have prevented the timely linkage of PAN and Aadhaar. The circular provides a much-needed respite by ensuring that no additional tax liability will be imposed in these circumstances.
Background and Context
This relaxation follows Circular No. 6 of 2024, issued on April 23, 2024, which extended the deadline for linking PAN and Aadhaar to May 31, 2024, for transactions up to March 31, 2024. This extension was intended to prevent higher TDS/TCS charges due to the inability of taxpayers to complete the PAN-Aadhaar linkage within the original timeframe.
Both Circular No. 6 of 2024 and Circular No. 8 of 2024 are available for reference on the official Income Tax India website at www.incometaxindia.gov.in.
The CBDT’s latest circular demonstrates a commitment to easing administrative burdens and addressing taxpayer grievances, especially in sensitive situations involving the death of a taxpayer.
