TDS Pan Error shortage of Deduction.
This query is : Resolved
31 January 2024
Sir/mam,
We have deducted TDS U/s.194J @10% of One person, we have filed Q3 Tds return and we received due to short deduction of Pan error , because the person not linked pan and aadhar
Now the same we have informed to party now he linked, my doubt is we have to pay short deduction of amount or previous amount adjust please kindly guide
Thanking you,
We have deducted TDS U/s.194J @10% of One person, we have filed Q3 Tds return and we received due to short deduction of Pan error , because the person not linked pan and aadhar
Now the same we have informed to party now he linked, my doubt is we have to pay short deduction of amount or previous amount adjust please kindly guide
Thanking you,
31 January 2024
SInce during the specified period PAN was Inoperative Higher rate of TDS would be applicable, so you will have to pay the Balance Amount and accordingly file return and the Person will get the refund of TDS when he files the return
You need to collect the Extra TDS from customer or adjust in next payment
You need to collect the Extra TDS from customer or adjust in next payment
Message likes :
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17 August 2025
Clarification: TDS Deduction Issues Due to PAN Status
Here’s a comprehensive breakdown of what's happening and the relief available:
1. When Higher TDS May Apply
Section 206AA: TDS must be deducted at the highest of the statutory rate, the rate in force, or 20%, if PAN is missing or invalid.
Section 206AB: Applies if the deductee hasn’t filed ITR for the last 2 years and TDS/TCS exceeded ₹50,000 each year. Higher TDS—twice the usual rate or 5%—must be deducted.
If both sections apply, the highest applicable rate is used.
TaxGuru
legacypartners.in
2. Relief for Inoperative PAN Linked to Aadhaar
Transactions up to 31 Mar 2024: If PAN is regularized by 31 May 2024, no penalty or higher TDS applies—regular rate is accepted.
Transactions from 1 Apr 2024 to 31 July 2025: If PAN is made operative by 30 Sep 2025, any demand will be dropped.
For payments from 1 Aug 2025 onward, relief continues if PAN is activated within two months of the relevant month.
The Economic Times
+1
Rajput Jain & Associates
3. Steps If You've Received a Demand Notice
Check the PAN status—operative vs. inoperative.
File a rectification return to correct PAN and reprocess TDS.
You may need to deposit pending TDS or apply unutilized challans to clear demand.
ICMAI
4. Recommended Best Practices
Conduct bulk PAN validity checks via TRACES.
Update your compliance process to reflect new relaxation rules.
Communicate with payees to help them regularize PAN timely and ease TDS issues.
Conclusion:
Short deduction or lower TDS due to PAN errors—especially inoperative PANs—can attract higher rates. However, recent relief notifications by CBDT offer practical leeway if PAN is regularized within the specified timeline. Prompt corrective action and strong systems are your best defense.
Here’s a comprehensive breakdown of what's happening and the relief available:
1. When Higher TDS May Apply
Section 206AA: TDS must be deducted at the highest of the statutory rate, the rate in force, or 20%, if PAN is missing or invalid.
Section 206AB: Applies if the deductee hasn’t filed ITR for the last 2 years and TDS/TCS exceeded ₹50,000 each year. Higher TDS—twice the usual rate or 5%—must be deducted.
If both sections apply, the highest applicable rate is used.
TaxGuru
legacypartners.in
2. Relief for Inoperative PAN Linked to Aadhaar
Transactions up to 31 Mar 2024: If PAN is regularized by 31 May 2024, no penalty or higher TDS applies—regular rate is accepted.
Transactions from 1 Apr 2024 to 31 July 2025: If PAN is made operative by 30 Sep 2025, any demand will be dropped.
For payments from 1 Aug 2025 onward, relief continues if PAN is activated within two months of the relevant month.
The Economic Times
+1
Rajput Jain & Associates
3. Steps If You've Received a Demand Notice
Check the PAN status—operative vs. inoperative.
File a rectification return to correct PAN and reprocess TDS.
You may need to deposit pending TDS or apply unutilized challans to clear demand.
ICMAI
4. Recommended Best Practices
Conduct bulk PAN validity checks via TRACES.
Update your compliance process to reflect new relaxation rules.
Communicate with payees to help them regularize PAN timely and ease TDS issues.
Conclusion:
Short deduction or lower TDS due to PAN errors—especially inoperative PANs—can attract higher rates. However, recent relief notifications by CBDT offer practical leeway if PAN is regularized within the specified timeline. Prompt corrective action and strong systems are your best defense.
17 August 2025
Sir this all queries which you are responding now resolved months ago, I request you to kindly resovle queries which are open , also I think this all replies are AI (Chatgpt) generated response. P
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