New Delhi, May 28 – The Income Tax Department issued a reminder on Tuesday, urging taxpayers to link their Permanent Account Number (PAN) with Aadhaar by May 31 to avoid potential tax deduction at a higher rate. Under income tax regulations, failure to link PAN with biometric Aadhaar results in the deduction of Tax Deducted at Source (TDS) at double the applicable rate.
Last month, the income tax department issued a circular stating that no penal action would be taken for short deduction of TDS if the taxpayer links their PAN with Aadhaar by the specified deadline.
In a statement posted online, the department emphasized the importance of linking PAN with Aadhaar before May 31, 2024, to prevent tax deduction at an elevated rate.
Additionally, the Income Tax Department advised reporting entities, including banks and forex dealers, to file Statement of Specified Financial Transactions (SFT) by May 31 to avoid penalties.
“The deadline to file SFT is May 31, 2024. Avoid penalties by filing accurately and on time,” the department underscored.
Reporting 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 involved in dividend payouts or share buybacks.
These institutions are mandated to furnish details of specific financial transactions or reportable accounts recorded or maintained by them during the fiscal year.
Delay in filing SFT returns may result in penalties of up to Rs 1,000 for each day of default, while non-filing or inaccurate statements may also lead to penalty imposition.
Through SFT filings, the Income Tax Department monitors high-value transactions conducted by individuals, ensuring compliance with tax regulations.
