Deduction of TDS: Check Status of PAN Aadhaar linking of deductee to avoid Income Tax Notice:

Deduction of TDS: Check Status of PAN Aadhaar linking of deductee to avoid Income Tax Notice Individuals must deduct tax deducted at source (TDS) before making certain payments. While it is vital to deduct TDS at the specified rate, it is much more crucial to deduct the appropriate amount of TDS based on one's PAN-Aadhaar linking status and deposit it with the government on time. This is because if a person's PAN is inoperative, a greater rate of TDS will be deducted. If a PAN is not linked to Aadhaar, it becomes inoperative or inactive. The TDS deductor or collector will face all legal consequences and tax penalties just because he or she neglected to check the status of the deductee's PAN and deducted a lower TDS amount. If the TDS deductor fails to check the status of the deductee's PAN on the date of the TDS deduction, all penalties and other legal consequences will be imposed on him alone. This is because it is the TDS deductor's responsibility to verify the status of the PAN.

Why is it important to check PAN's status?

TDS deducted must be deposited with the government within 30 days of the end of the month in which they were deducted. However, it is possible that the PAN, which was inactive on the day TDS was deducted, became operational later during the period preceding the statutory deadline for submitting the deducted money to the government. For example, TDS was deducted on March 20 and deposited on April 15th. Experts believe that if the seller's PAN was inoperative on March 20, even if it was operational on April 15, a higher TDS amount must be deducted.

Transactions where TDS is deducted

• There are some transactions where TDS is deducted or collected:
• Rent from house property exceeding Rs.50,000 per month.
• Sale of Immovable Property of Rs.50 lakh or more.
• Payment to Resident Contractors and Professionals exceeding specified limits.

Salary payments.

Expenditure on Foreign Remittance in specific cases.

How to Check PAN Status?

Individuals can check the status of their PAN by going to the Income-tax department's website and clicking on the 'Verify PAN Status' option in the 'Quick Links' section. This online application allows users to verify PAN details by entering basic information such as the PAN, full name, date of birth, and other important details. Consequences for Taxpayer if fails to deduct/collect the correct amount of TDS If an individual is required to deduct or collect TDS but fails to deduct the correct amount, the consequences are severe. Failure to deduct the correct amount of TDS may result in the tax department imposing additional interest, penalties, and possible legal action to compel compliance. These implications underline the significance of strictly adhering to TDS provisions, ensuring proper deduction, and depositing TDS on time to avoid financial liabilities, penalties, and legal repercussions.