Clarification on TDS/TCS Rates for Deceased Taxpayers: Exemption from Higher Rates Under Sections 206AA and 206CC.
05 August 2024
The Income Tax Board has addressed issues related to the higher tax rates under sections 206AA and 206CC of the Income-tax Act, 1961. As per Circular No. 06 of 2024, taxpayers were given until May 31, 2024, to link their PAN and Aadhaar to avoid higher tax deductions. However, some taxpayers who passed away before this deadline were unable to complete the linkage, leading to undue tax liabilities for deductors or collectors.
To resolve this issue, the Board has clarified that if a deductee or collectee died before May 31, 2024, and thus could not link their PAN and Aadhaar, the higher tax rates under sections 206AA and 206CC will not apply. Instead, tax deductions or collections should follow the standard provisions of Chapter XVII-B or Chapter XVII-BB of the Act.