May 15, 2020
Not furnishing PAN or Aadhaar? You won’t get this latest benefit announced by Modi govt
Not furnishing PAN/Aadhaar for income tax purposes? The benefit of latest reduction in the rates of tax deducted at source and tax collected at source will not apply to those not furnishing PAN or Aadhaar. In view of the COVID-19 pandemic, the Central government has reduced rates of TDS and TCS on various transactions by 25 per cent. However, it won’t apply to those who have to pay higher tax on account of not furnishing the PAN or Aadhaar numbers.
In an official notification, the Central Board of Direct Taxes said, “there shall be no reduction in rates of TDS or TCS, where the tax is required to be deducted or collected at higher rate due to non-furnishing of PAN/Aadhaar. For example, if the tax is required to be deducted at 20% under section 206AA of the Income-tax Act due to non-furnishing of PAN/Aadhaar, it shall be deducted at the rate of 20% and not at the rate of 15%”.
The rates of Tax Deduction at Source (TDS) for some non-salaried specified payments made to residents has been reduced by 25% for the period from 14th May, 2020 to 31st March, 2021 to provide more funds at the disposal of the taxpayers for dealing with the economic situation arising out of COVID-19 pandemic.
As per the CBDT notification, the TDS on the amount paid or credited during the period from 14th May, 2020 to 31st March, 2021 will be deducted at the reduced rates specified. Also, the tax on the amount received or debited during the period from 14th May, 2020 to 31st March, 2021 will be collected at the reduced rates specified in the notification.