Government Eases TDS/TCS Rules for Families After Death Before PAN-Aadhaar Linkage
The Indian government has made it easier for families dealing with the death of a taxpayer who had not yet linked their PAN and Aadhaar cards. The Central Board of Direct Taxes (CBDT) issued a circular on August 5 to address the challenges faced by taxpayers.
What is TDS and TCS?
TDS stands for Tax Deducted at Source, and TCS stands for Tax Collected at Source. These are taxes collected by the government in India.
New Rules
The new rules state that if a taxpayer dies before linking their PAN and Aadhaar cards, no tax will be deducted or collected for transactions made up to March 31, 2024. This applies if the taxpayer died before May 31, 2024.
Why This Change?
The government made this change to help families who were facing difficulties because the taxpayer had not linked their PAN and Aadhaar cards before passing away.
Important Dates
On April 23, 2024, the CBDT extended the deadline for linking PAN and Aadhaar to avoid higher TDS/TCS rates. The new deadline is for transactions made up to March 31, 2024.
Consequences of Not Linking PAN and Aadhaar
If a taxpayer does not link their PAN and Aadhaar, their PAN will become inactive. This means:
- No refunds will be made against such PANs.
- No interest will be paid on refunds during the period the PAN is inactive.
- TDS and TCS will be deducted or collected at a higher rate.
Doubts Revealed
TDS/TCS -: TDS stands for Tax Deducted at Source, and TCS stands for Tax Collected at Source. These are ways the government collects tax directly from the income or transactions.
PAN -: PAN stands for Permanent Account Number. It is a unique number given to every taxpayer in India to keep track of their tax payments.
Aadhaar -: Aadhaar is a 12-digit unique identity number issued to Indian residents by the government. It contains biometric and demographic data.
CBDT -: CBDT stands for Central Board of Direct Taxes. It is a part of the Indian government that deals with policies and laws related to direct taxes.
Circular -: A circular is an official document or notice issued by the government to provide information or instructions on a specific matter.
March 31, 2024 -: March 31, 2024, is the date until which the new relaxed rules for TDS/TCS will apply if the taxpayer died before May 31, 2024.
May 31, 2024 -: May 31, 2024, is the date before which the taxpayer must have died for their family to benefit from the relaxed TDS/TCS rules.
