Big Relief for Taxpayers: TDS Demands removed due to non-linking of PAN-Aadhaar

In a remarkable development, the Centralized Processing Cell (TDS) reprocessed TDS returns for the financial year 2023-24. The reprocessing removed short deduction demands from returns affected by higher TDS/TCS rates due to PAN non-linkage with Aadhaar, in accordance with the relaxation provided by Circular.

The circular was issued to provide assistance to taxpayers who faced higher TDS/TCS rates due to their PAN not being linked with Aadhaar. According to the circular, transactions up to March 31, 2024, were eligible for this waiver if the PAN was connected to Aadhaar before May 31, 2024. This move was aimed to reduce the unnecessary burden on taxpayers and streamline the compliance procedure.

The CPC (TDS) immediately acted on the circular’s provisions, reworking the concerned TDS returns for fiscal year 2023-24. This reprocessing has resulted in the reduction of short deduction needs caused by the higher TDS/TCS rates imposed on non-linked PANs.

The Income Tax Department ensured that the reprocessing and removal of demands would be finished in the first week of June 2024. This prompt action has offered much-needed relief to taxpayers who had been experiencing anomalies in their TDS returns because of the PAN-Aadhaar linking issue.

Tax experts and taxpayers should review the reprocessed TDS returns to ensure that the short deduction demands have been resolved. This step is critical to ensuring that the reprocessed returns reflect the correct TDS levels and meet the Circular’s relaxation requirements.

How to Verify the Updated TDS Returns

Tax experts and taxpayers can use these steps to check the updated TDS returns:

• Visit and Log in to the TRACES Portal.
• Access the TDS statement: Navigate to the applicable TDS statement for the financial year 2023-24.
• Check for updates. Check the statement to make sure that the short deduction demands have been deleted.
• Cross-check with Circular: Ensure that the changes made are consistent with the provisions of Circular.