Understand the consequences of not linking PAN with Aadhaar by the deadline, TDS implications, and key sections of the Income Tax Act. Learn about the linking process, fees, and how to avoid 20% TDS. Explore Section 194C (TDS on Payments to Contractors and Sub-Contractors) and Section 194A (TDS on interest on loan), including thresholds, rates, and compliance. Stay informed to ensure compliance with the latest regulations.
As per the subject mentioned above, the PAN card became inactive from 01-July-2023 and will remain inactive until you link your PAN with the Aadhaar card. This rule applies to those who obtained their PAN card on or before 1st July 2017. The initial deadline for linking was 31st March 2022. Until this date, linking Aadhaar with PAN was free. Subsequently, from 1st April 2022 to 30th June 2022, the fee was Rs 500. However, starting 1st July 2022, the fee increased to Rs 1000, and this fee adjustment was effective until 30th June 2023. Following this date, the PAN card was deactivated, and the fee remained at Rs 1000.
According to the information provided above, you can link your PAN card with your Aadhaar card for a fee of Rs 1000. This payment must be made on the Income Tax website in the same year as the linking process. The payment is processed through the “Head Other Receipt 500,” and it takes 48 hours to complete the linking.
All individuals are hereby informed that if their PAN and Aadhaar are not linked by 01-07-2023, a 20% TDS (Tax Deducted at Source) will be applicable. This deduction is effective immediately, and unless you link your PAN with Aadhaar, 20% TDS will be deducted from your income. The TDS slab will be applicable from the day you complete the linking process.
Section 194C of the Income Tax Act, 1961 – TDS on Payments to Contractors and Sub-Contractors
Section 194C of the Income Tax Act, 1961 – TDS on Payments to Contractors and Sub-Contractors on Payments to Contractors and Sub-Contractors on payments made to contractors and sub-contractors. It ensures that tax is deducted at the source of income, making the process more efficient for the government to collect taxes. Here is a guide to understanding Section 194C:
1. Applicability:
– Who Should Deduct TDS:
– Any person, other than an individual or a Hindu Undivided Family (HUF), responsible for paying any sum to a resident contractor for carrying out any work (including supply of labor) in pursuance of a contract is required to deduct TDS.
2. Types of Contracts Covered:
– Nature of Contracts:
– Contracts for work, including advertising, broadcasting, and telecasting, and contracts for supply of goods or services fall under the purview of Section 194C.
3. Threshold Limits:
– Individuals and HUFs:
– If an individual or HUF is making a payment to a contractor in a single contract exceeding Rs. 30,000, TDS is required to be deducted.
– Others (Companies, Firms, etc.):
– For other deductors, the threshold limit is Rs. 1,00,000.
4. Rate of TDS:
– TDS Rate:
The TDS rate under Section 194C is 1% for payments to an individual or HUF contractor and 2% for payments to a contractor other than an individual or HUF.
5. Exemptions:
– Small Contractors:
– If the aggregate of all payments to a contractor or sub-contractor in a financial year does not exceed Rs. 30,000 (Rs. 1,00,000 for others), TDS is not required to be deducted.
6. Documentation and Compliance:
– TDS Deduction and Payment:
– The deductor needs to deduct TDS at the time of credit to the account of the contractor or at the time of payment, whichever is earlier. TDS deducted must be deposited to the government and a TDS return needs to be filed.
7. Penalties for Non-Compliance:
– Penalties for Non-Deduction or Non-Payment:
– Failure to deduct TDS or non-payment of the deducted TDS within the stipulated time can attract penalties and interest.
Important Note:
It’s crucial to refer to the latest amendments, notifications, and circulars for any changes in rates or rules in Section 194C of the Income Tax Act, 1961 – TDS on Payments to Contractors and Sub-Contractors
This guide is a broad overview, and it’s advisable to consult with a tax professionallike LEGATO BUSINESS SOLUTION LLP or refer to the latest provisions of the Income Tax Act for specific and updated information tailored to your circumstances.
Section 194 A TDS On interest on loan:-
Section 194 A TDS On interest on loan pertains to the deduction of tax at source (TDS) on interest payments other than interest on securities. This section applies to various types of interest payments, and it outlines the rules and procedures for deducting TDS. Here’s a guide to understanding Section 194A:
1. Applicability:
-Types of Interest Covered:
– Section 194A applies to payments of interest other than interest on securities. It includes interest on loans, fixed deposits, recurring deposits, etc.
2. Threshold Limits:
– Individuals and HUFs:
– TDS is not applicable if the aggregate interest paid or credited during the financial year does not exceed Rs. 5,000.
– Others:
– For others (non-individuals and non-HUFs), the threshold limit is Rs. 10,000.
3. Rate of TDS:
– TDS Rate:
– As of my last knowledge update in September 2021, the TDS rate under Section 194A is typically 10%. However, the rates can be different based on the specific type of interest payment.
4. Form of Payment:
– Deposit to the Government:
– The person responsible for paying the interest is required to deduct TDS and deposit it to the government. The deducted TDS needs to be reported in the TDS return.
5. Exemptions:
– Senior Citizens:
– Senior citizens (individuals aged 60 years or more) are eligible for a higher threshold of Rs. 50,000 before TDS is applicable.
6. Documentation and Compliance:
– TDS Deduction and Payment:
TDS is to be deducted at the time of credit to the account of the payee or at the time of payment, whichever is earlier. The deductor must deposit the TDS to the government within the specified time and file TDS returns.
7. Penalties for Non-Compliance:
– Penalties for Non-Deduction or Non-Payment:
– Failure to deduct TDS or non-payment of the deducted TDS within the stipulated time can attract penalties and interest.
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This guide is a broad overview, and it’s advisable to consult with a tax professional like LEGATO BUSINESS SOLUTION LLP or refer to the latest provisions of the Income Tax Act for specific and updated information tailored to your circumstances.
Which website
What type of fools sit in positions to advise the government on such matters?
Your banks have been provided with PAN AND AADHAR (BY FILLING UP RESPECTIVE FORMS AND SUBMITTING THEM AT THE COUNTER IN THE BRANCH) by the customers themselves. So where is the need to tax the customer for NOT LINKING?
INFACT, THE BANKING INDUSTRY SHOULD HAVE BEEN DOING IT THEMSELVES USING THEIR DATABASES TO COORDINATE OR DEAL WITH THE INCOME TAX DEPARTMENT FOR FDs.
You are Taxing disadvantaged people who are not informed “properly ( initially it was widely publicised that it’s a mandate for tax payers)”, who DON’T USE BROKER SERVICES for linking who have just deposited earnings into FD and who “personally on their own PAN” don’t fall anywhere closer to the tax bracket for the interest and other formalities, but act as a shield to family members.
WE HAVE A DIRTY HABIT OF HARASSING PEOPLE WHO SAVE, THE DISADVANTAGEOUS PEOPLE TO FACILITATE “OTHERS”!