Accordingly if you earn Rs 2.5 lakh per annum and have not provided your PAN and Aadhaar details to your employer, you are likely to be in trouble if you fail to act soon. The Income Tax Department has asked employers to deduct 20 per cent salary as Tax Deducted at Source (TDS) from all employees who fail to furnish Pan and Aadhaar details.
Meanwhile this rule was formulated by the Central Board of Direct Taxes (CBDT) and came into effect on january 16. The rule will be applicable to those who earn more than Rs 2.5 lakh per annum and this rule is aimed at keeping a close eye on TDS payments and revenue earned by this segment. In the financial year 2018-19, revenue from this segment amounted to around 37 per cent of the total direct tax collection.
Moreover in its 86-page page circular, the CBDT has said employees have to quote PAN and Aadhaar details compulsorily as per the Section 206-AA of the Income Tax Act. Apparently the circular reads, "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." The CBDT says the lack of PAN or Aadhaar details is creating problems in giving credit. Perhaps tax deducters are, therefore, advised to collect and quote correct Aadhaar or PAN details in the TDS statements for salaries in the Form 24Q, which is for tax deducted from salaries.