Deadline to link PAN With Aadhaar ending; Income Tax Dept issues advisory

PTC Web Desk: The Income Tax Department has issued a reminder for taxpayers to link their Permanent Account Number (PAN) with their Aadhaar by May 31 to prevent tax deductions at a higher rate. According to income tax regulations, if a PAN is not linked with the biometric Aadhaar, Tax Deducted at Source (TDS) will be deducted at double the applicable rate.

In a circular released last month, the Income Tax Department said no action would be taken for short deduction of TDS if the taxpayer links their PAN with Aadhaar by the May 31 deadline. The department reiterated this in a recent post on X: “Please link your PAN with Aadhaar before May 31, 2024, if you haven’t already, in order to avoid tax deduction at a higher rate.”

The Income Tax Department has reminded reporting entities, such as banks and forex dealers, to file their Statement of Specified Financial Transactions (SFT) by May 31 to avoid penalties. “The deadline to file SFT (Statement of Specified Financial Transactions) is May 31, 2024. Avoid penalties by filing accurately and on time,” the department stated.

Entities required to file SFT returns include forex dealers, banks, sub-registrars, Non-Banking Financial Companies (NBFCs), post offices, issuers of bonds/debentures, mutual fund trustees, and companies paying dividends or buying back shares. These institutions must furnish details of certain financial transactions or any reportable account they have registered, recorded, or maintained during the year.

Failure to file SFT returns on time can result in a penalty of up to Rs 1,000 for each day of default. Non-filing or filing inaccurate statements may also lead to additional penalties. Through SFT, the Income Tax Department tracks high-value transactions undertaken by individuals, ensuring better compliance and monitoring of financial activities.