The Income Tax department had on 26.3.2008 advised all tax deductors to invariably quote PAN in their TDS returns in all cases wherein they have deducted tax and deposited it into the government account. This has been emphasized as non-quoting of PAN results in inability to give credit to the deductees while processing their cases.

The need for accurate quoting of PAN is critical as from assessment year 2007-08, the department has prescribed return forms without attachments. Hence tax credit can only be given on the basis of information made available by the deductors through the TDS returns.

In order to ensure compliance, the department has prescribed a threshold limit for quoting of PAN. This is 95% for salary cases and 85% for non-salary cases from the last quarter of FY 2007-08 and onwards. Without compliance to these limits, returns of the deductors will not be accepted and such deductors will be treated as non-filers and would be exposed to penal consequences.

BSC/SS/GN/77/08

PAN quoting requirement in TDS returns ensures tax credit allocation; non-compliance leads to return rejection and penalties. Tax deductors are required to quote PAN in TDS returns whenever tax is deducted and deposited so that credit can be given to deductees; because return forms no longer accept attachments, PAN in deductor-provided TDS returns is the sole basis for credit. The department prescribes compliance thresholds for PAN quotation by payment type, and non-compliance will cause non-acceptance of returns and expose deductors to treatment as non-filers with penal consequences.