Submit PAN and Aadhar and avoid unnecessaryTax deductions

Time to be careful, the Income Tax Department has clearly mentioned that employers need to follow the rules regarding tax deduction of their employees. So, 20% or higher tax will be deducted, if employees fail to disclose the details of their PAN (permanent account number).

The CBDT(Central Board of Direct Taxes) has mentioned in its recent circular about the tax deductions of the employees of any employer in India and advised them to furnish the details of their correct PAN and Aadhar details to their employer in order to get their salaries without any tax deductions.(If the income of the employee is below the ₹2.5 lakh taxable limit, no TDS is required.) the employer must follow this instruction you to avoid any issue you from CBDT.  Any employer fails to do this, should face the penalty by CBDT.

The circular was issued last week states that the companies that are preparing their accounts for the financial year-end have to assess all tax dues of all types and deduct the highest of all. It was mentioned in the circular that the deduction has to be made at the rate of 20, If the average rate of income tax based on the rates in force is below 20%. Or if the average rate exceeds 20%, tax has to be deducted at the average rate.

It is a hard time for the authorities to meet their target in direct tax collection, and there is already a sharp reduction in corporate tax rates that targets stimulating investments and reviving the economy.

Employers need to be very careful in their TDS obligations. If there is any default the causes not only penalty but leaves a scar in their company’s  history. The circular reiterated that employers should obtain and quote the tax write-off and collection Account No (TAN) in challans, TDS-certificates, statements and other documents issued. Failure to try to so could fetch a fine of ₹10,000, the circular said. The circular holds the applicable tax rates and surcharges at various income brackets for the convenience of employers.