TDS Return filing new changes |One more step to do before filing TDS Return

Rate this post

If you are a TDS deductor then it is mandatory to pay TDS every month and File TDS Returns Quartertly. Click here to know TDS Rates and TDS Payment and TDS Returns Last Date.

Recently PAN Aadhaar linking is made mandatory for every Indian citizen and in case of non linking of PAN with Aadhaar there are many consequences, one of them is higher rate of TDS which is 20%. If you are a TDS deductor then you must comply this requirement. Let’s know in detail

TDS deduction:

  • Tax Deducted at Source (TDS) is crucial in India’s tax system, collecting taxes at the source of income.
  • Accuracy in TDS deduction is essential, considering one’s PAN-Aadhaar linking status.
  • Failure to ensure accurate deduction can lead to higher TDS rates @20% if PAN is inactive due to non-linkage with Aadhaar.
  • TDS deductors may face legal consequences and tax penalties for not verifying dedutee’s PAN status and deducting lower TDS amounts than required.
  • TDS deduction serves as a mechanism to ensure tax compliance and prevent tax evasion.
  • PAN-Aadhaar linking status verification is necessary to determine the appropriate TDS rate.
  • Inactive PAN due to non-linkage with Aadhaar can result in higher TDS deductions to cover potential tax liabilities.
  • Non-compliance with TDS regulations can lead to penalties, fines, and legal repercussions for deductors.
  • Regular monitoring and updating of PAN-Aadhaar linkage status are essential to avoid errors in TDS deduction.
  • Deductors must stay informed about changes in tax laws and regulations regarding TDS deduction to maintain compliance.
  • Proper documentation and record-keeping of TDS deductions are essential for audit trails and legal compliance.

Why is verifying PAN status crucial on the deduction date? How can one verify the status of a PAN?

📣 Before deducting TDS, ensure the payee has linked their PAN with Aadhar, effective April 1, 2023.

If not, deduct TDS at a higher rate @ 20% as per section 206AA read with Rule 114AAA(3)(iii).

The department is pursuing demands for differences.

To check PAN-Aadhar linkage status, log in to TRACES at

Visit the “Dashboard” and find “PAN Verification” in the “Quick Links menu

You can check PAN status either individually or consolidated to save your time

What types of transactions necessitate TDS deduction?

  • Rent from a house property exceeding Rs 50,000 per month.
  • Sale of immovable property amounting to Rs 50 lakh or more.
  • Payments made to resident contractors and professionals that surpass specified limits.
  • Salary payments made to employees.
  • Expenditure on foreign remittance in certain specific cases
  • Interest payments on fixed deposits exceeding specified limits.
  • Commission payments exceeding a certain threshold.
  • Royalty payments to resident individuals or entities.
  • Payments made for professional or technical services.
  • Payments made for advertisements exceeding a certain threshold.
  • Payments for the acquisition of securities like shares and bonds.
  • Any income received in the form of winnings from lotteries, puzzles, or games exceeding specified amounts.
  • Payments made for catering or hiring services exceeding a certain limit.
  • Payments made for the transfer of certain immovable properties other than agricultural land.
  • Payments made for rent on plant and machinery exceeding specified thresholds.

What are the consequences if a taxpayer fails to deduct or collect the correct amount of TDS?

Failing to deduct the correct amount of TDS can result in severe consequences for individuals responsible for deduction or collection. This failure may prompt the tax department to impose additional interest, penalties, and even legal proceedings to ensure compliance. These outcomes underscore the significance of adhering diligently to TDS provisions, ensuring accurate deduction, and timely depositing of TDS to avoid financial liabilities, penalties, and legal repercussions. It’s crucial to stay updated on TDS regulations and fulfill obligations promptly to mitigate potential risks.

  1. Penalties: The taxpayer may be subject to penalties imposed by the tax authorities for non-compliance with TDS regulations.
  2. Interest: The taxpayer may be liable to pay interest on the shortfall amount of TDS from the date it was supposed to be deducted or collected until the date of actual deduction or collection.
  3. Disallowance of Expenses: The expenses for which TDS should have been deducted but wasn’t may be disallowed as deductions while calculating the taxpayer’s income.
  4. Legal Action: The tax department may initiate legal proceedings against the taxpayer for non-compliance with TDS provisions, which could result in fines or other legal consequences.
  5. Recovery Proceedings: The tax department may undertake recovery proceedings to collect the unpaid TDS amount along with interest and penalties.
  6. Loss of Reputation: Non-compliance with TDS regulations can tarnish the taxpayer’s reputation and credibility, especially if it leads to legal actions or penalties.

Enroll in our TDS & TCS Practical Course

Visit for practical courses

Pooja Gupta

CA Pooja Gupta (CA, ISA, having 15 years of experience. Educator and Digital Creator

Disclaimer:- The opinions presented are exclusively those of the author and CA Guruji Classes. The material in this piece is intended purely for informational purposes and for individual, non-commercial consumption. It does not constitute expert guidance or an endorsement by any organization. The author, the organization, and its associates are not liable for any form of loss or harm resulting from the information in this article, nor for any decisions made based on it. Furthermore, no segment of this article or newsletter should be employed for any intention unless granted in written form, and we maintain the legal right to address any unauthorized utilization of our article or newsletter.

CA Pooja Gupta (CA, ISA, having 15 years of experience. Educator and Digital Creator

Leave a Comment