PAN-Aadhaar Link: If you have not linked your Aadhaar card to PAN card till now, then this news is useful for you. The Income Tax Department has advised taxpayers to link PAN to Aadhaar by May 31 to avoid tax deduction at a higher rate.

According to the Income Tax rules, if the Permanent Account Number (PAN) is not linked to the biometric Aadhaar, then TDS is required to be deducted at twice the applicable rate.

What is the detail

The Income Tax Department had issued a circular last month stating that no action would be taken if the assessed linked his PAN with Aadhaar by the due date of May 31. The department wrote on the social media platform ‘X’ on Tuesday, “Please link your PAN with Aadhaar before 31 May 2024 to avoid tax deduction at higher rate, if you have not done it already.

In a separate post, the IT department also asked reporting entities including banks, foreign exchange dealers to file SFT by May 31 to avoid penalty. The department said, “The last date for filing SFT (Statement of Specified Financial Transactions) is May 31, 2024. Avoid penalty by filing correctly and on time.”

Fine up to Rs 1,000

Reporting entities Foreign exchange dealers, banks, sub-registrars, NBFCs, post offices, bond/debenture issuers, mutual fund trustees, companies paying dividends or buying back shares are required to file SFT returns with the tax authorities. Delay in filing SFT returns attracts a penalty of up to Rs 1,000 for each ‘default’ day. Penalties can also be levied for not filing SFT or filing incorrect details. The income tax department keeps a watch on high value transactions made by an individual through SFT.