As per Section 139AA of the Income-tax Act,1961 (‘the Act’) that every person who has been allotted a Permanent Account Number (‘PAN’) shall also be required to link the same with his Aadhaar.

If the PAN is not linked with Aadhaar by 31 March 2021, it shall become inoperative immediately. Rule 114AAA of the Income-tax Rules (‘the Rules’) provides that in case of a person whose PAN has become inoperative, it shall be deemed that he has not furnished, intimated or quoted the PAN at all, and he shall be liable for all the consequences under the Act for not furnishing, intimating or quoting the PAN. However, the person can make his PAN operative again by linking his Aadhaar and the PAN shall be operative from the date of intimation of Aadhaar. As per the provisions of Section 206AA of the Act, where a payee fails to furnish his PAN to the deductor, tax shall be deducted at a higher rate of:

• rate specified in the relevant provision of the Act or
• at the rates in force or
• at the rate of 20%

For more information, please visit Section 139AA of the Income-tax Act,1961.

The tax shall be deducted/collected at source if the payment/collection is made to/from the person satisfying the following conditions:

• The person does not file income tax return for both of the previous two Financial Years (FYs) immediately before the FY in which tax is required to be deducted,
• The income tax return (not belated return) filing due date is expired and
• The total amount of TDS and TCS is Rs.50,000 or more in each of these two previous years.

It does not apply to a non-resident who does not have a permanent establishment in India. Permanent establishment for this purpose includes a fixed place of business where the enterprise’s business is carried out wholly or partially.

For more information, please visit Section 206AB and 206CCA of the Income-tax Act,1961.

The tax shall be deducted under Section 194Q by a buyer carrying on a business whose total sales, gross receipts or turnover from the business exceeds Rs. 10 crores during the financial year immediately preceding the financial year in which such goods are purchased. This provision shall be applicable from 01-07-2021.

Thus, the liability to deduct tax under this provision in the financial year 2021-22 shall arise if the turnover of the purchaser was more than Rs. 10 crores in the financial year 2020-21.

For more information, please visit Section 194Q of the Income-tax Act,1961.