A delegation of Vidarbha Industries Association led by VIA President, Vishal Agrawal, CA Naresh Jakhotia met Nitin Gadkari, Hon’ble Union Minister of Road, Transport & Highways, New Delhi today, 29th January at Nagpur to discuss and submit a detailed memorandum on the issues related to the non-linking of PAN with Aadhar of the Deductee.
VIA informed the Minister that approximately 11.50 Cr PAN was not connected with Aadhar and so was invalidated. VIA welcomes the government’s efforts in connecting PAN with Aadhar and the many date extensions granted from time to time. VIA also conveyed the significance of integrating PAN with Aadhar and supports the government’s decision to invalidate the 11.50 Cr of PAN. However, as a result of this, many PANs have been invalidated & resultantly industries and bankers are now compelled to collect TDS at a higher rate, even if the PAN is provided the same is linked to Aadhar. If the deduction is made at the normal TDS rate then the deductor is getting a short deduction notice, informed the delegation.
While discussing, VIA not only pointed out the unintended consequences but also suggested various measures to ensure compliance without loss of revenue.
VIA suggested that as a one-time measure, the concession of applying the regular TDS rate to the business houses may be granted till 31st March 2024. By this time, the business houses will equip themselves with the proper system to ensure compliance with the higher TDS rate. VIA also appealed to the Government to provide mass PAN Verification utility for Deductors so as to verify PAN status before filing TDS return before filing the same to avoid hardship of getting notices.
It was also appealed that if PAN is operative or is linked with adhar subsequently anytime before on or before 31st March 2024, then the demand should be nullified. Alternatively, a cutoff date of TDS Payment each month be provided for every month if PAN is inoperative. This will enable Deductor to verify the same before payment of TDS at month end and thus TDS return will be filled correctly to avoid subsequent notices. This will result in saving of unwanted time and compliance burden of the deductors. Further, as a one-time measure, the short deduction demand for FY 2023-24 may be dropped if the PAN is linked with Aadhar subsequently at any time afterwards.
VIA also brought to the knowledge of the minister that at present, if the TDS is deducted during the period for which PAN is inoperative, then the same is not reflected in 26AS / AIS causing hardship to the Deductees to claim the credit after linking the PAN with Adhar. VIA suggested to auto populate the TDS entries in respective Pan holder 26AS / AIS for all the previous quarters, where its TDS is deducted at Higher Rate when its PAN is inoperative due to linking with Adhar, once he/she has linked the PAN with Adhar and Pan becomes operative. In respect of properties transactions, VIA submitted that taxpayers are getting notices of Higher deduction of TDS if PAN is inoperative at the time of payment/credit. The amount is very high as the value of the transaction is high and also there is no way, the buyer will deposit the higher TDS if the property deal is concluded and payment is done to the seller. Further, it may be noted that the status of inoperative PAN is not reflected at the time of filing Challan Cum Return in Form No. 26QB. This is creating hardship to a lot of OLD Taxpayers, rural tax payers where PAN is not linked with Adhar. To overcome this, VIA demanded waiver of requirement of higher TDS in case of property transaction up to 31st March 2024 & mandatory verification of PAN status through online utility (for the date of deduction ) at the time of Payment of TDS should be made available to Deductors to avoid hardship.
Delegation submitted that TDS is already an unrewarding compliance burden on the Deductor, just to ensure that the Income tax department is able to track the taxability of income in the hands of the recipient. The present impact arising due to non-linking would be very severe & painful. It would be better if CBDT comes out with some relief measures and eases the impact of non-linking of PAN with Aadhar. VIA appealed the Government to distinguish the case of invalid PAN from No PAN cases.
VIA very strongly appealed to the Government to give blanket relief to the Deductor in all above cases, at least for FY 2023-24 as this is the first year wherein taxpayers may be realizing its impact.
Nitin Gadkari, Hon’ble Union Minister of Road, Transport & Highways, New Delhi assured to take up the issue appropriately to reduce the unintended compliance burden of the industries.
Vishal Agrawal, CA Naresh Jakhotia, Shelendra Manawat, Girdhari Mantri, Ashish Mukim, Ninand Nandgaonkar, Sachin Jajodia, Himanshu Chordiya, Ranjit Chand, Ajay Vaswani along with industrial fraternity joined for the representation.
