Important Update: Revised TDS Rates For Inactive PANs

The Income Tax Department has sent an important notice to Tax Deductors and Collectors, alerting them about the impact of having an 'Inoperative' PAN status on TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) rates. They stress the need to follow Section 206AA/206CC of the Income Tax Act and advise checking CBDT’s Notification No. 15/2023 and Circular No. 3/2023 from March 28, 2023, for more information.

Key Points of the Attention Notice:

1. Impact on TDS/TCS Rates:

   Individuals or entities with an 'Inoperative' PAN status will now face higher TDS/TCS rates. This change is based on the guidelines of Section 206AA/206CC of the Income Tax Act. It's essential to keep your PAN active to prevent increased tax deductions.

2. Reference to CBDT’s Notifications:

   The notice advises referring to CBDT’s Notification No. 15/2023 and Circular No. 3/2023 from March 28, 2023, for detailed information on the revised TDS/TCS rates and the implications of having an 'Inoperative' PAN status.

3. Verification of PAN Status:

   The Income Tax Department offers an easy verification process for Tax Deductors/Collectors. Stakeholders can use the 'Verify PAN Status' link, available under the quick links section, to check the current status of the PAN in question.

4. Importance of Active PAN Status:

   The notice emphasizes the importance of maintaining an active PAN status to ensure accurate and compliant TDS/TCS deductions. Both deductors/collectors and deductees/collectees must take proactive steps to avoid unintended financial consequences.

5. Deadline for PAN Verification:

   Stakeholders are urged to verify the PAN status promptly to prevent any disruptions in TDS/TCS processes. Non-compliance could lead to higher tax deductions, impacting all parties involved.

Also Read: Businesses have received notices from the GST Department

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