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Short deduction due to inoperative PANs

4284 views 5 replies

Floss Hype

1 Points Posted on 17 October 2023

Certain cases with inoperative PANs are being treated same as Invalid PANs as the justification report demands 20% instead of the applied rates .

I want to know

1.Is my understanding correct? Are we indeed required to deduct at a higher rate if the PAN is not linked with Aadhaar?

2.Can we rectify this situation by linking Aadhaar with PAN now to avoid penalties, or will the transaction date be considered in determining the PAN's operability?

3. One valid and operative PAN is mentioned along with the valid and inoperative ones in the list ( justification report), and no other reason is apparent to us apart from the possibility of this PAN getting operative after the transaction. Please verify if this analogy is correct.

Thanks in advance!

Replies (5)

sabyasachi mukherjee

Profession Business

28238 Points Posted on 17 October 2023

Short deduction due to inoperative pan

Rishabh Goenka

9 Points Posted on 18 October 2023

Even if the PAN-Aadhar linking is done at a subsequent date, liability to deduct Tax at a higher rate for the period when the linking was not done would remain.

E.g. Linking done in October 2023. Liability for the last quarter (July - Sep 2023) would be @ 20%.

We have seen one case where the linking was done in Sep 2023 and intimation u.s200A has been received with respect to TDS deducted of the party in July and August 2023.