CBDT Relaxes TDS/TCS Provisions for Death of Deductee/Collectee Before PAN-Aadhaar Linkage

The relaxation aims to alleviate the burden on taxpayers and their families by providing clarity and relief in cases where the mandatory linkage of PAN and Aadhaar could not be completed due to unforeseen circumstances.

The Central Board of Direct Taxes (CBDT) has announced a relaxation in the provisions related to Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) under the Income-tax Act, 1961, in cases where the deductee or collectee has passed away before linking their Permanent Account Number (PAN) with Aadhaar.

In response to difficulties faced by taxpayers, the CBDT issued Circular No. 8 of 2024 on August 5, 2024. This circular addresses situations where a taxpayer has died on or before May 31, 2024, prior to the mandatory linkage of PAN and Aadhaar. The relaxation stipulates that there will be no liability on the deductor or collector to deduct or collect tax under sections 206AA and 206CC of the Act for transactions up to March 31, 2024.

This move follows Circular No. 6 of 2024, issued on April 23, 2024, which had previously extended the deadline for linking PAN and Aadhaar to May 31, 2024, for transactions conducted up to March 31, 2024. Both Circular No. 6 and Circular No. 8 can be accessed on the official Income Tax India website at www.incometaxindia.gov.in.

The relaxation aims to alleviate the burden on taxpayers and their families by providing clarity and relief in cases where the mandatory linkage of PAN and Aadhaar could not be completed due to unforeseen circumstances.