Central Board of Direct Taxes issued Circular No. 08/2024 on August 5, 2024, addressing the issue of higher TDS/TCS rates under sections 206AA and 206CC of the Income-tax Act, 1961, in cases where the deductee or collectee has passed away before linking their PAN and Aadhaar. The circular responds to taxpayer grievances concerning instances where deceased individuals could not link their PAN and Aadhaar by the deadline of May 31, 2024, leading to higher tax demands on deductors and collectors. To resolve these issues, the Board has clarified that no liability for higher TDS/TCS rates will apply if the deductee or collectee passed away before the PAN-Aadhaar linkage could be completed. The circular stipulates that transactions conducted up to March 31, 2024, will not attract higher tax rates under sections 206AA/206CC if the death occurred on or before May 31, 2024. The standard provisions of Chapter XVII-B or Chapter XVII-BB of the Act will still apply to such cases.
Circular No. 08/ 2024
F. No. 275/4/2024-IT(B)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi. the 5th August, 2024
Sub: Non-applicability of higher rate of TDS/TCS as per provisions of section 206AA/ 206CC of the Income-tax Act, 1961, in the event of death of deductee/collectee before linkage of PAN and Aadhaar- reg.
As per Circular no. 06 of 2024 dated 23.04.2024, the Board had provided a window of opportunity to the taxpayers upto 31.05.2024 for linkage of PAN and Aadhaar for the transactions entered into upto 31.03.2024 so as to avoid higher deduction/collection of tax under section 206AA/206CC of the Income-tax Act, as the case maybe.
2. Several grievances have been received from the taxpayers where they have cited instances of demise of the deductee/collectee during the said period (i.e. on or before 31.05.2024) before the option to link PAN and Aadhaar could have been exercised. In such cases, tax demands are standing against the deductor/collector as a result of failure to link PAN and Aadhaar of the deceased person.
3. In order to redress such grievances of the taxpayers, the Board, hereby specifies that in respect of cases where higher rate of TDS/TCS was attracted under section 206AA/206CC of the Act pertaining to the transactions entered into upto 31.03.2024 and in case of demise of the deductee/collectee on or before 31.05.2024 i.e. before the linkage of PAN and Aadhaar could have been done, there shall be no liability on the deductor/collector to deduct/collect the tax under section 206AA/206CC, as the case maybe. The deduction/collection as mandated in other provisions of Chapter XVII -B or Chapter XVII-BB of the Act, shall be applicable.
4. Hindi version to follow
(Surjeet Kumar)
Under Secretary to the Government of India
Tele: 23095478
Copy to:-
1. PS to FM/OSD to FM/PS to MoS (R)/OSD to MoS(R)
2. PPS to Secretary (Revenue)
3. The Chairman, CBDT & all Members, CBDT
4. All Pr.CCsIT, CCsIT/Pr. DGsIT/DGsIT
5. All Joint Secretaries/CsIT, CBDT
6. Commissioner of Income-tax (Media & TP) and official Spokesperson, CBDT, New Delhi
7. CIT, (CPC-TDS)
8. ADG (PR,P&P) for necessary action
9. JCIT, Database Cell, with a request to upload the order on the website irsotticersonline.gov.in
10. Web Manager, 0/o DGIT(Systems) with a request to upload the order on the website of incometaxindia.gov.in
11. The Institute of Chartered Accountants of India, IP Estate, New Delhi
12. All Chambers of Commerce
13. The Guard File
(Surjeet Kumar)
Under Secretary to the Government of India
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