Manner of calculation of demand iro inoperative PAN

TDS 285 views 4 replies

Avinash

Job

40 Points Joined January 2009

How the demand u/s 139AAA is being calculated by the Income Tax Department in the case of inoperative PAN.

One of my friends have total taxable income at Rs. 5,69,590/- in F.Y. 2023-24 and his PAN was not linked with Aadhar. The DDO has failed to deduct the tax on higher rate as required by the section 139AA. Now he intimated the demand of Rs. 88,918/- on his taxable income of Rs. 5,69,590/-.

We are not able to understand that how the above demand was calculated by the Income Tax Department.

Could anyone please guide on the manner of calculation of above demand.

Thanks

Replies (4)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

209900 Points Joined July 2016

In accordance with provisions of section 206AA, in case of Inoperative PAN, tax is deductible under Chapter XVIIB at higher of the following rates-

at the rate specified in the relevant provision of this Act or

- at the rate or rates in force; or

- at the rate of twenty per cent:

Avinash

Job

40 Points Joined January 2009

As per law, its OK, but question is that how the tax amount of Rs. 88,918/- is calculated on income of Rs. 5,69,590/-.

Thanks

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

209900 Points Joined July 2016

It would be difference amount of total tax minus already tax deducted.

Sowmya.G

610 Points Joined March 2007

Dear Avinash, From the notices with respect to inoperative PANs the tax is calculated at the average rates. i.e applicable tax slab rate for the income and 20% higher rate. The same is adopted in your scenario as well adding up interest under section 234B and C.