Regarding TDS Demand

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This query is : Resolved

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This discussion addresses a TDS demand raised because the deductee's PAN was inoperative when the return was filed. Although the PAN has since become operative and the return revised, the demand remains. Guidance is sought on resolving this outstanding demand and whether it can be lapsed. The response clarifies that revising the TDS return wasn't mandatory if the PAN was inoperative at deduction, as the deductee could claim it in their ITR. It also highlights that exemptions for inoperative PANs under Circular 6/2024 were only for transactions up to March 31, 2024, provided the PAN became operative by May 31, 2024; otherwise, higher TDS applies even if the PAN is later reactivated.

Suresh S. Tejwani

Suresh S. Tejwani (Querist)
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20 December 2024 There is a case in which deductee party's pan was inoperative when the return was filed hence there is a demand to deduct tds at higher rate. After which the pan becomes operative and hence we have revised the return with same deductee entry, but the demand is still outstanding.
Please guide us what should we do further.

And futher can the demand raised would be lapsed?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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20 December 2024 Revision of TDS return was not mandated if the PAN was inoperative at the time of TDS deduction. The deductee could have claimed it in his ITR.

Sowmya.G

Sowmya.G (Expert)
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20 December 2024 Circular no 6/2024 provided exemption from deducting higher rate for inoperative PANs for transactions entered upto 31st March 2024 only if the PAN is changed operative on or before 31st May 2024. If the PAN status was inoperative post 31st May 2024 higher tds deduction is attracted even though the PAN becomes operative at a later date.

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