The Central Board of Direct Taxes (CBDT) has relaxed provisions of TDS/TCS in event of death of deductee/collectee, before linkage of PAN and Aadhaar.

In view of genuine difficulties being faced by taxpayers, CBDT issued the Circular no. 8 of 2024 dated 05.08.2024, and vide the same, the Government has relaxed the provisions of TDS/TCS as per the Income-tax Act, 1961(the ‘Act’) in the event of death of deductee/collectee before linking of PAN and Aadhaar.

In order to redress the grievances of the taxpayers wherein instances have been cited, of demise of the deductee/collectee on or before 31.05.2024 and before the option to link PAN and Aadhaar could have been exercised, the Circular provides that there shall be no liability on the deductor/collector to deduct/collect the tax under section 206AA/206CC of the Act, as the case maybe pertaining to the transactions entered into upto 31.03.2024.

This is in continuation of Circular no. 6 of 2024 dated 23.04.2024 issued earlier by CBDT wherein the date for linking of PAN and Aadhaar was extended upto 31.05.2024 for the taxpayers (for the transactions entered into upto 31.03.2024) to avoid higher TDS/ TCS as per the Act. The Circular No. 06 of 2024 dated 23.04.2024 and Circular No. 08 of 2024 dated 05.08.2024 are available on www.incometaxindia.gov.in.

TDS/TCS relief where deductee/collectee died before PAN Aadhaar linkage, easing withholding for prior transactions entered before cutoff. The Circular exempts the deductor/collector from the obligation to apply higher withholding/collection rates under the relevant non linkage provisions for transactions entered into up to 31.03.2024 where the deductee/collectee died on or before the extended PAN-Aadhaar linkage deadline and could not exercise the option to link PAN and Aadhaar.