Employees earning more than 2.5 lakhs per annum will have to pay 20% or more from their salary as TDS if they fail to provide PAN and Aadhaar details to the employer. The new rules have been lead down by the Central Board of Direct Taxes (CBDT). The same came into effect starting from January 16.
CBDT shared the information in an 86-page page circular, quoting that it’s compulsory for the employees to quote PAN and Aadhaar details as per the Section 206-AA of the Income Tax Act. The circular stated, “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.”
If an employee fails to provide these details, the employer is responsible to make deductions either at the tax rate on the employee’s salary or 20 per cent or above.
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