What Happens If Your Aadhaar-PAN Link Is Missing? New Rule Imposes 20% TDS

Property buyers might face a hefty 20% Tax Deducted at Source (TDS) instead of the usual 1% if their Aadhaar card and PAN card aren’t linked. The Income Tax Department has initiated action against numerous property buyers, citing the enforcement of new regulations.

Revised TDS Rates : Impact on Buyers

Under the Income Tax Act, individuals purchasing property exceeding Rs 50 lakhs are required to pay 1% TDS to the central government. The remaining 99% goes to the seller. However, failure to link Aadhaar and PAN could mean an alarming 20% TDS imposition, a significant jump from the previous 1%.

Notice to Buyers: The Aftermath

Months after the deadline for Aadhaar-PAN linkage lapsed, the Income Tax Department has begun issuing notices to buyers involved in property transactions exceeding the stipulated value. These notifications demand a hefty 20% TDS payment for properties crossing the Rs 50 lakh mark.

Seller’s Inactive PAN: Buyer’s Predicament

Instances have arisen where property sellers’ PAN cards were found unlinked to their Aadhaar, rendering them inactive. Consequently, buyers with inactive PAN cards are now receiving notifications to clear the outstanding TDS on properties exceeding Rs 50 lakhs.

Linking Aadhaar-PAN : Remedial Measures

The Income Tax Act mandates the Aadhaar-PAN linkage in ITR filings. Despite the deadline passing in March 2022, individuals can still link their PAN and Aadhaar by remitting a late fee of Rs 1000. This measure helps avoid the repercussions of the revised TDS rates and associated penalties.

This development underscores the criticality of maintaining the Aadhaar-PAN linkage, ensuring compliance with tax regulations and averting substantial financial implications for property buyers.