Where is the pan-base important?
This rule has been mentioned in a circular of CBDT. According to the circular, it has been clarified in section 206AA of the Income Tax Act that it is mandatory to provide PAN and Aadhaar details on the taxable amount received by the employee. If not, the employer can deduct tax on your source of income. Overall, 20% tax can be deducted on income.
Penalty will be imposed for giving wrong details
Taxpayers have to give their income and PAN-Aadhaar details completely correct. According to the Act, TDS can be deducted at a much higher rate if the details are not correct with an employer. If details are not provided, TDS can be deducted according to the rate fixed in the relevant provision of the Act. In the second case, TDS can be deducted according to whatever rate is applicable. In another situation, 20% tax can be deducted on the income of the employee. The employer will decide the tax amount on these conditions and will deduct TDS at a higher rate.
In which case will you not have to pay tax?
According to the CBDT rule, no tax will be payable to the employee if the TDS under section 192 is within the taxable limit on calculating. However, if TDS is calculated under section 192, the taxable limit goes up, then the average rate of income tax will be fixed according to the applicable rate under the provision of section 192. If the tax calculated is less than 20% of income, then there will be 20% tax deduction and if tax goes above 20% then tax will be deducted according to the average rate.
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