Latest news with #CBDT
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Business Standard
6 hours ago
- Business
- Business Standard
Got a tax notice for submitting less TDS? CBDT relief may offer respite
The Central Board of Direct Taxes (CBDT) has provided some relief to taxpayers and businesses who have been served tax demand notices for deducting tax at source (TDS) or collecting tax at source (TCS) at normal rates from payees whose Permanent Account Numbers (PANs) had become inoperative for want of Aadhaar linkage. Under the Income-Tax Act, inoperative PANs attract higher TDS/TCS rates of 20 per cent. CBDT has spared deductors and collectors from paying the differential tax and penalties, provided certain conditions are met. What triggered this relief? Several deductors had raised concerns about notices from the tax department demanding additional tax where they applied normal TDS/TCS rates, unaware that the payee's PAN was inactive. 'The CBDT's circular provides significant relief to taxpayers who were saddled with tax demands arising from short deduction or collection on account of a payee's PAN being inoperative due to non-linkage with Aadhaar,' says Ashish Mehta, partner at Khaitan & Co. Who benefits and how? Relief applies in cases where: -Transactions occurred between April 1, 2024 and July 31, 2025, and -The payee's PAN is made operative by September 30, 2025. In such cases, demand notices for short deduction will be quashed after rectification of returns or reprocessing. Example: Consider A buying property worth Rs 1 crore from B in May 2024 and deducting TDS at 1 per cent (Rs 100,000). If B's PAN was inoperative, A was liable to deduct TDS at 20 per cent (Rs 20,00,000), resulting in a tax demand of Rs 19 lakh. 'According to the new circular, A will no longer be required to pay this demand if B's PAN becomes operative by September 30, 2025,' explains Mehta. No penalty or interest if PAN is updated 'If the payee links PAN with Aadhaar within the prescribed timelines, the deductor need not pay any interest or penalty for short deduction,' adds Mehta. What should taxpayers do now? -Verify PAN-Aadhaar linkage of employees, tenants, or sellers before making payments. -Advise payees to complete linkage promptly to avoid higher TDS/TCS rates. -Monitor compliance timelines to ensure eligibility for relief. 'This proactive step is critical for employers, landlords, property buyers, and small businesses to stay out of trouble,' says Mehta.
NDTV
7 hours ago
- Business
- NDTV
ITR Filing 2025: Final ITR Date And What Salaried Taxpayers Need To Know
Salaried individuals across India have been granted additional time to file their Income Tax Returns (ITR) for the Financial Year 2024-25 (Assessment Year 2025-26). The Central Board of Direct Taxes (CBDT) has officially extended the ITR filing deadline for non-audit cases, including salaried taxpayers, from the usual July 31, 2025, to September 15, 2025, as per its recent circular. This extension comes amid reported delays in the availability of updated ITR forms and e-filing utilities on the Income Tax Department's portal. Additionally, many taxpayers faced issues with the late reflection of TDS data in Form 26AS and AIS, prompting calls for more time to ensure accurate filing. However, experts warn that while the return filing deadline is extended, the payment of any self-assessment tax due must still be completed by July 31, or else penal interest under Section 234A may apply. Notably, the extension also impacts refund interest positively. As per Section 244A, taxpayers who are due refunds may receive up to 33% higher interest, as the interest accrues from April 1, regardless of the extended deadline. However, this interest is taxable and must be reported in the ITR. Late filing beyond September 15 will attract a penalty of Rs 5,000 (if income exceeds Rs 5 lakh) and Rs 1,000 for lower incomes under Section 234F. Belated or revised returns can still be filed until December 31, 2025, while updated returns (ITR-U) can be submitted up to March 31, 2030. Taxpayers are encouraged to file early to avoid last-minute technical issues on the e-filing portal.
India Today
9 hours ago
- Business
- India Today
NOIDA is now tax-free. Check who benefits and how
NOIDA has just earned itself a new label, i.e, 'tax-free'. But what does this really mean for the city, its businesses, and its people? The news has already stirred up interest among builders, shopkeepers, and investors Central Board of Direct Taxes (CBDT) recently notified that the New Okhla Industrial Development Authority (NOIDA) will enjoy tax-free status under Section 10(46A) of the Income-tax Act, beginning from the assessment year 2024–25. CA (Dr) Suresh Surana points out, however, that there's more to this than meets the its press note dated 17 July 2025, the CBDT clarified, 'This notification shall be effective from the assessment year 2024-2025, subject to the condition that the assessee continues to be an authority constituted under the Uttar Pradesh Industrial Area Development Act, 1976 (U.P. Act No.6 of 1976) with one or more of the purposes specified in sub-clause (a) of clause (46A) of section 10 of the Income-tax Act.' Surana pointed out, 'It is important to note that this exemption is limited solely to income tax and may not extend to other statutory levies.'He further explains that this special relief comes with conditions: 'The so-called 'tax-free' status should not be misconstrued as a blanket exemption from all forms of taxation. It is a specific fiscal relief aimed at supporting NOIDA's public infrastructure and developmental responsibilities by relieving it from the burden of income tax, provided it continues to fulfil the statutory conditions outlined in the notification.'SO, WHAT'S TAX-FREE, AND WHAT'S NOT?In simple terms, only NOIDA's income tax burden is waived. Surana clarifies, 'This exemption is limited solely to income tax and may not extend to other statutory levies.'So, while NOIDA will continue to collect fees and charges, it no longer needs to pay income tax on the money it earns from rents, fees, or grants, as long as it sticks to its main job of urban planning and development for the public BUSINESSES COULD GAINThough the tax break applies directly only to the authority, businesses in NOIDA could feel a welcome ripple effect. With more money left in its kitty, the authority is expected to boost spending on roads, water supply, public transport, industrial zones, and other civic works.'Businesses operating in NOIDA may experience indirect financial benefits,' Surana says. He explains, 'While the exemption itself applies to NOIDA and not directly to private enterprises, it can lead to cost efficiencies and improved infrastructure for businesses functioning within its jurisdiction.'Better roads and quicker approvals mean smoother operations, fewer hold-ups and less red tape. Over time, Surana says, 'This may enhance its capacity to reinvest in civic infrastructure, industrial development, public utilities, and urban planning. Over time, this could translate into better services, quicker project approvals, and improved amenities for commercial establishments operating in the area.'NO EXPIRY DATE, BUT THERE'S A CATCHadvertisementMany wonder how long this tax-free status will last. There is no deadline, but there's a clear condition. The exemption will continue as long as NOIDA sticks to its original role of public development under the Uttar Pradesh Industrial Area Development Act, Surana sums up, 'The tax-free status applies from AY 2024–25 onwards and continues indefinitely, without a preset end date provided NOIDA remains legally constituted under its enabling Act and carries out the specified public-interest functions.'WHY THIS MATTERS FOR NOIDA'S FUTUREAt a time when cities are competing hard to attract businesses and investors, this tax relief could give NOIDA a fresh edge. If managed well, the extra funds could mean smoother roads, quicker building clearances, and better facilities, making life easier for companies and residents the new tag doesn't mean a free pass for everyone, the hope is that NOIDA's 'tax-free' badge, used wisely, will help the city grow faster, smarter, cleaner and more business-friendly in the years ahead.- Ends
Mint
20 hours ago
- Business
- Mint
PAN-Aadhaar linking: CBDT modifies norms to address grievances
The Central Board of Direct Taxes (CBDT) has issued a fresh circular modifying earlier guidelines on the consequences of Permanent Account Number (PAN) becoming inoperative under Rule 114AAA of the Income-tax Rules, 1962. The move provides relief to tax deductors and collectors facing notices for short deduction or collection of TDS/TCS. As per Circular No. 3 of 2023, PANs that were not linked with Aadhaar became inoperative from July 1, 2023, attracting higher TDS/TCS rates under Sections 206AA and 206CC of the Income-tax Act, 1961. Relief was later provided through Circular No. 6 of 2024 for transactions till March 31, 2024, where PANs were made operative on or before May 31, 2024. However, taxpayers continued to report grievances regarding notices for defaults related to lower TDS/TCS deductions where the PAN of the deductee or collectee was inoperative at the time of transaction. To address these concerns, the CBDT has now specified that deductors/collectors will not be held liable for higher TDS/TCS rates under Sections 206AA/206CC in the following situations: For payments or credits made between April 1, 2024 and July 31, 2025, where the PAN is made operative (through Aadhaar linkage) on or before September 30, 2025. For payments or credits made on or after August 1, 2025, where the PAN is made operative within two months from the end of the month in which the transaction occurred. In such cases, normal TDS/TCS deduction and collection rules as per other provisions of Chapter XVII-B and XVII-BB of the Income-tax Act will continue to apply. The move aims to reduce undue hardship to compliant deductors/collectors and streamline TDS/TCS administration amidst ongoing PAN-Aadhaar linkage enforcement.
Time of India
a day ago
- Business
- Time of India
Relief for these Property buyers and other taxpayers who got tax demand notice due to short deduction of TDS from in-operative PAN holders; Know more
What did the income tax department say? Where the amount is paid or credited from April 1, 2024 to July 31, 2025 and the PAN is made operative (as a result of linkage with Aadhaar) on or before September 30, 2025. Where the amount is paid or credited on or after August 1, 2025 and the PAN is made operative (as a result of linkage with Aadhaar) within two months from the end of the month in which the amount is paid or credited. What does this mean? How can property buyers get relief due to this circular? 'Inoperative PANs cannot be used for filing income tax returns (ITR) or conducting key financial transactions. This poses a challenge in cases such as property sales, where the seller's PAN is inactive due to non-linkage with Aadhaar. In such situations, the law mandates that the buyer must deduct TDS at 20% instead of the regular 1%. However, many buyers, unaware of the PAN status, end up deducting TDS at 1%, assuming compliance. This typically leads to a tax demand notice to the property buyer from the Income Tax Department for the shortfall of 19%.' Karundia explains how this relief works for those who short deducted TDS from April 1, 2024 to July 31, 2025: 'This benefit also applies to property buyers who failed to deduct TDS at the higher 20% rate from sellers with inactive PANs. For instance, if someone purchased a property on April 2, 2024, from a seller whose PAN was inoperative, the buyer was required to deduct TDS at 20% rather than the standard 1%. If they didn't and received a demand notice, the notice will be cancelled provided the seller activates their PAN by September 30, 2025.' Gupta explains how the relief works for those who short deducted TDS on or after August 1, 2025: The recent CBDT Circular No. 9/2025, issued on July 21, 2025, offers relief in such cases. It provides that no demand for short deduction will be raised if the deductee—i.e., the property seller—makes their PAN operative by linking it with Aadhaar within two months from the end of the month in which the payment was made. For example, if a property is purchased on August 2, 2025, from a seller with an inoperative PAN and the buyer deducts TDS at 1%, the buyer will not be penalized, provided the seller regularizes their PAN by October 31, 2025. Why did the income tax department give this relief? The Central Board of Direct Taxes vide Circular No. 03 of 2023 dated 28th March, 2023 had specified that the consequences of PAN becoming inoperative as per Rule 114AAA of the Income-tax Rules, 1962 shall take effect from 1st July, 2023 and continue till the PAN becomes operative. Further, Circular No. 06 of 2024 dated 23.04.2024 issued by the Board, provided relief to deductors/collectors from the applicability of higher TDS/TCS rates under section 206AA/206CC of the Income-tax Act, 1961 (hereinafter 'the Act') for transactions entered into upto 31.03.2024, where the PAN becomes operative (as a result of linkage with Aadhaar) on or before 31.05.2024. Several grievances have been received from the taxpayers that they are in receipt of notices intimating that they have committed default of 'shortdeduction/collection' of TDS/TCS while carrying out the transactions where the PANs of the deductees/collectees were inoperative. In such cases, as the deduction/collection has not been made at a higher rate, demands have been raised by the Department against the deductors/collectors while processing of TDS/TCS statements under section 200A or under section 206CB of the Act, as the case may be. The Income Tax Department has given relief to those income tax payers who got an income tax demand notice due to short deduction of TDS and short collection of TCS from those deductors and collectors, who have an in-operative PAN. An PAN will be termed in-operative, if it is not linked with income tax department said that all such tax demand notices issued due to short deduction/collection of the TDS/TCS, will be deleted, if the PAN is made operative again within a specified a circular dated July 21, 2025 the Income Tax Department said: "...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, in the following cases:This circular says that those taxpayers who deducted TDS or collected TCS at a lower rate than otherwise prescribed for in-operative PAN cases will get relief from tax demand subject to the condition that the PAN is made operative within a specified circular mentions two different deadlines for giving this releif from short tax deduction and collection Accountant Ashish Karundia explains that numerous tax deductors and collectors have received TDS/TCS demand notices from TRACES for applying a lower tax rate on transactions involving taxpayers whose PAN was inactive at the time, often due to it not being linked with Aadhaar. "This circular issued on July 21, 2025, now provides relief in such situations. If the affected taxpayer activates their PAN by linking it with Aadhaar by September 30, 2025, any related short deduction or collection demands issued to the deductor or collector will be withdrawn."Karundia adds: 'Further, for transactions occurring on or after August 1, 2025, if the taxpayer's PAN becomes active within two months following the end of the month in which the transaction took place, the TDS/TCS demand will also be dropped. This second relief is not limited by the September 30 per Section 194-IA on property sales above Rs 50 lakh, buyers have to deduct TDS at 1% rate before making the payment to the sellers. However if the seller's PAN is in-operative then TDS at 20% rate is required to be deducted. The problem is in cases where the buyer deducted 1% TDS instead of 20% as it should be when the seller's PAN is in-operative. In such cases the property buyer will get income tax demand notice for 19% short deduction in TDS. This circular can give relief to such Accountant Mohit Gupta, partner, PNAM & Co. LLP, a chartered accountancy firm, says:ET Wealth Online has asked many chartered accountants about how this circular can give releif to property buyers, here's what they said:The Income Tax Department said this in the circular:The tax department said that to redress this grievance of taxpayers they partially modified the Circular No. 3 of 2023.
