Come April 2008, fixed deposit holders will not be allowed to avail any credit against taxes paid on their interest earnings if banks do not quote their PAN numbers.
Many fixed deposit holders could be left in lurch as income tax department has tightened rules on TDS or tax deducted at source.
Banks are supposed to cut tax at source for interest income above Rs 10,000. But in 2005-06 less than half of non-salaried income had PAN numbers and in future these will not be eligible for refunds.
The Finance Minister has recently discussed the matter with public sector bank chiefs although taxman is yet to issue formal instructions to banks.
Depositors having taxable income but not quoting their PAN will not be permitted to fill up specific forms explaining why they do not have one.
Government's alarm stems from the fact that from next financial year it proposes to demat all TDS certificates and that will need PAN numbers to be tracked. With TDS payments accounting for over 30 per cent of direct tax collections for the government it is better to be safe than sorry.
NO PAN ! NO REFUND ON FD EARNINGS...!
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CCI News Desk
Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.
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