New Delhi: The Income Tax Department has issued a reminder, urging taxpayers to link their PAN (Permanent Account Number) with Aadhaar by May 31 to avoid higher tax deduction rates.
According to income tax regulations, if PAN is not linked with Aadhaar, Tax Deducted at Source (TDS) is required to be deducted at twice the applicable rate.
Last month, the Income Tax Department issued a circular stating that no punitive action will be taken for the short deduction of TDS if the taxpayer links their PAN with Aadhaar by May 31.
“Ensure your PAN is linked with Aadhaar by May 31, 2024, to prevent higher tax deduction rates,” the department announced on X.
In a separate communication, the department instructed reporting entities, such as banks and forex dealers, to submit Statement of Specified Financial Transactions (SFT) by May 31 to avoid penalties. “The deadline for filing SFT (Statement of Specified Financial Transactions) is May 31, 2024. Ensure accurate and timely filing to avoid penalties,” the department emphasised.
Reporting entities required to submit SFT returns include forex dealers, banks, sub-registrars, NBFCs, post offices, bond/debenture issuers, mutual fund trustees, and companies involved in dividend payments or share buybacks.
These entities must provide details of specific financial transactions or reportable accounts maintained by them throughout the year.
Failure to submit SFT returns on time may result in a penalty of up to Rs 1,000 for each day of delay. Non-filing or inaccurate reporting may also lead to penalty imposition.
SFT enables the Income Tax Department to monitor high-value transactions conducted by individuals.