Income Tax Circular on Non-Applicability of Higher Rate of TDS/TCS

The Central Board of Direct Taxes (CBDT) has issued a Circular on the Non-applicability of a higher rate of TDS/TCS as per provisions of section 206AA/ 206CC of the Income-tax Act, 1961, in the event of the death of deductee/collectee before linkage of PAN and Aadhaar.

The Relevant Text of the Circular is given below:

As per Circular no. 06 of 2024 dated 23.04.2024, the Board had provided a window of opportunity to the taxpayers upto 31 .05.2024 for linkage of PAN and Aadhaar for the transactions entered into upto 31.03.2024 so as to avoid higher deduction/collection of tax under section 206AA/206CC of the Income-tax Act, as the case maybe.

Several grievances have been received from taxpayers, who have mentioned instances of the deductee/collectee’s death during the specified period (i.e. on or before May 31, 2024), before the option to link PAN and Aadhaar could be implemented. In such circumstances, tax demands are levied against the deductor/collector for failing to link the deceased person’s PAN and Aadhaar.

In order to address such grievances of the taxpayers, the Board, hereby specifies that in respect of cases where a higher rate of TDS/TCS was attracted under section 206AA/206CC of the Act related to the transactions entered into upto 31.03.2024 and in case of death of the deductee/collectee on or before 31.05.2024 i.e. before the linkage of PAN and Aadhaar could have been done, there shall be no liability on the deductor/collector to deducVcoliect the tax under section 206AA/206CC, as the case may be.

The deduction/collection requirements outlined in other provisions of Chapter XVII-B or Chapter XVII-BB of the Act shall apply.

For Official Circular Download PDF Given Below: