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20% TDS Can be Cut if PAN, Aadhaar Details Not Shared with Employer: I-T Dept

The rule, which has been made by the Central Board of Direct Taxes (CBDT), came into effect on January 16, 2020. As per CBDT, this has been done after there were problems in giving credit due to lack of PAN or Aadhaar details.

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Updated:January 25, 2020, 1:03 PM IST
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20% TDS Can be Cut if PAN, Aadhaar Details Not Shared with Employer: I-T Dept
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If a person has not submitted his or her PAN and Aadhaar details then the employer can deduct 20% of the employee’s salary as a part of Tax Deducted at Source (TDS).

The rule, which has been made by the Central Board of Direct Taxes (CBDT), came into effect on January 16, 2020. As per CBDT, this has been done after there were problems in giving credit due to lack of PAN or Aadhaar details.

In the circular, which is 86 pages long, the CBDT has stated that employees have to share Aadhaar and PAN details under the Section 206-AA of the Income Tax Act.

"Section 206AA in the Act makes furnishing of PAN or Aadhaar number, as the case may be, by the employee compulsory in case of receipt of any sum or income of amount, on which tax is deductible," the circular said.

Further, the circular also mentioned that if an employee fails to do so, then the company, which has employed the defaulter, is responsible for deducting his or her salary by 20 per cent or more.

The idea behind brining in this rule is to closely monitor the TDS payments and revenue that is earned by this segment.

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