In a major relief for Indian taxpayers, the Central Board of Direct Taxes (CBDT) has waived demands for short TDS deduction arising from payments to inoperative PAN holders. This addresses the widespread issue where deductors received tax notices for not applying the higher TDS rate mandated for unlinked PANs. This blog details the conditions of this relief as per CBDT Circular No. 9/2025, outlines the crucial deadlines like September 30, 2025, and explains the actionable steps for both deductors and deductees to benefit from this waiver and ensure future compliance.

This blog post explains the important relief offered by CBDT Circular No. 9/2025, dated July 22, 2025, about higher TDS/TCS rates for transactions with inoperative PANs. It describes how deductors and collectors will not be held responsible for short deductions or collections if the deductee's or collectee's PAN is made operative within certain time frames, specifically by September 30, 2025, for past transactions and within two months from the end of the month for future ones. The summary underscores the circular's importance in tackling taxpayer complaints, easing the compliance load, and encouraging PAN-Aadhaar linkage. It urges readers to grasp the new rules and take action quickly.

The deadline for linking PAN and Aadhaar has been extended by the Indian government to December 31, 2025, for applications that are filed prior to October 1, 2024. Not adhering to this requirement could lead to the PAN becoming inactive and affect financial transactions.

Good news for TDS/TCS deductors! The deadline for linking PAN with Aadhaar has been extended until May 31st, 2024. This extension provides relief and ensures compliance with tax regulations. Stay informed and avoid penalties by understanding the implications of this extended deadline