Skip to main content

Inoperative PAN is not inactive PAN, clarifies I-T Dept amid concerns on ITR filing

Inoperative PAN is not inactive PAN, clarifies I-T Dept amid concerns on ITR filing

A permanent account number (PAN) that has become inoperative due to not being linked with the Aadhaar card, is not the same as an inactive PAN, the Income Tax Department clarified on July 18, amidst confusion over income tax return (ITR) filings.

"It is clarified that an inoperative PAN is not an inactive PAN. One may file the Income Tax Return (ITR), irrespective of PAN becoming inoperative," the taxation body said in a statement.
However, there will be consequences of an inoperative PAN, such as the "pending refunds and interest on such refunds will not be issued to inoperative PANs".
Also, the tax deducted at source (TDS) will be deducted at a "higher rate for inoperative PANs", it said. Similarly, the tax collected at source (TCS) will be "collected at a higher rate for inoperative PANs", the I-T Department added.




Consequences of Inoperative PAN

Inoperative PAN is not an inactive PAN. The individuals can file income tax return irrespective of PAN becoming inoperative. However the following are the consequences of inoperative PAN
  1. Pending Refunds or interest on such refunds will not be issued.
  1. TDS will be required to be deducted at higher rates for inoperative PAN.
  1. TCS will be required to collected at higher rates for inoperative PAN.
Hence it is advisable for all NRI’s /OCI’s/ Foreign Citizens to intimate their residential status to jurisdictional assessing officer as soon as possible.
Section 206AB & 206CCA – Tax Deduction or Collection at Source For Not Filing of Income Tax Return

Section 206AB is inserted after section 206AA of the income tax act. The latter provides for the deduction of TDS at higher rates for those who do not provide/furnish their Permanent Account Number (PAN). 

Similarly, section 206CCA for TCS is inserted after section 206CC of the Income Tax Act. Read on for a detailed explanation covering the recent CBDT circular no. 10/2022, the compliance check functionality and more.

Who is a specified person under section 206AB

Specified Person is the one who:
  • Has not filed the income tax return (ITR) for the preceding FY, and the income tax return (not belated return) filing due date has expired and
  • Total amount of tax deducted or collected (TDS and TCS) in the last FY is Rs.50,000 or more.
Note: It does not apply to a non-resident who does not have a permanent establishment in India. Permanent establishment for this purpose includes a fixed place of business where the enterprise’s business is carried out wholly or partially.

Penalty for non-linking of PAN with Aadhaar card

The taxpayers who have not linked their PAN-Aadhaar within the last date of 30th June 2023, can do so by paying a late penalty of Rs.1,000. They must pay the penalty before filing for the PAN-Aadhaar link on the Income Tax website. However, they need to ensure they have a valid PAN number, Aadhaar number and mobile number to pay the penalty.
by GST Info Tamil

New sections were introduced in the Finance Bill, 2021 to deduct TDS (tax deducted at source)/ collect TCS (tax collected at source) at higher rates when the amount is paid to specified persons who have not filed their income tax returns. 

By GST Info Tamil

Comments

Post a Comment

Popular posts from this blog

GST LUT – File Letter of Undertaking (LUT) Online

Letter of Undertaking is commonly known as LUT. The  GST LUT  is prescribed to be furnished in form GST RFD 11 under rule 96A, whereby the exporter declares that he/she would fulfill all the requirements prescribed under  GST  while exporting without making IGST payment. Know more about  exports under GST. Filing Letter of Undertaking is mandatory to export goods or service or both without payment of Integrated Taxes (IGST). If LUT has not been furnished, the export can only be made through payment of IGST or by furnishing an export bond. Initially, only the options of export bond was allowed. However, to improve ease of doing business, the Government introduced LUT. LUT was to be filed offline at the concerned GST office. Now, the Government has made the process of filing GST LUT online. Now, exporters can file LUT online through their respective GST Portal account easily by following the steps below. Eligibility for Export under LUT All GST registered goo...
Post a Comment
Read more

What is a Letter of Credit?

What is a Letter of Credit? An LC is a contract by which a bank guarantees the seller that the buyer will make the payment for the goods and services. The use of LCs to effect payment is widespread in international trade. This is because they offer security of payment for and receipt of goods to the parties involved in the trade transaction who may be in different countries. You can choose from the different types of LCs available according to your specific requirements. What are the different types of Letters of Credit? The different types of Letters of Credit offered by banks in India are as follows: Documentary A documentary LC is an obligation by the issuing bank to pay the agreed amount to the beneficiary (usually the seller) on behalf of the applicant (buyer) upon receipt of specified documents. Sight LC or Usance Credit A sight LC guarantees the payment once the beneficiary (the party which is about to receive the payment) presents the sight LC to the ban...
Post a Comment
Read more

What is the mode of payment under Section 80G?

What is the mode of payment under Section 80G? Taxpayers in India can claim deductions under Section 80G for eligible donations. Here are the key modes through which donations can be made: Cheque: Donations made via cheque are eligible for Section 80G deductions. Demand Draft: Contributions made through demand drafts also qualify for Section 80G benefits. Cash (for donations below Rs 2,000): Cash donations are accepted for deductions if they are below Rs 2,000. Note:  In-kind contributions such as food, material, clothes, medicines, etc., and donations exceeding Rs 2,000 should not be in cash to qualify for Section 80G deductions. Criteria for Deductions: Eligible Donations: Various donations specified in Section 80G are eligible for deductions. Deduction Percentage: The deductions can be up to 100% or 50% with or without restrictions, as specified in Section 80G. Section 80G Deduction: Eligible List of Funds/Charitable Institutions for Donations The prescribed funds and charitable...
Post a Comment
Read more