The Central Board of Direct Taxes (CBDT) has issued a crucial circular (No. 08/2024 dated August 05, 2024) providing clarity on the non-applicability of higher rates of Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) under sections 206AA and 206CC of the Income-tax Act, 1961, in the unfortunate event of the death of a deductee or collectee before the linkage of their Permanent Account Number (PAN) with Aadhaar.
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 the taxpayers where they have cited instances of demise of the deductee/collectee during the said period (i.e. on or before 31.05.2024) before the option to link PAN and Aadhaar could have been exercised. In such cases, tax demands are standing against the deductor/collector as a result of failure to link PAN and Aadhaar of the deceased person.
In order to redress such grievances of the taxpayers, the Board, hereby specifies that in respect of cases where higher rate of TDS/TCS was attracted under section 206AA/206CC of the Act pertaining to the transactions entered into upto 31.03.2024 and in case of demise 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 deduct/collect the tax under section 206AA/206CC, as the case maybe. The deduction/collection as mandated in other provisions of Chapter XVII-B or Chapter XVII-BB of the Act, shall be applicable.
Official copy of the circular has also been attached
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