This is important and I think all must know this specially those who are new to Tax.
What happens if you do not have the PAN and your tax is deducted.
If you do not have PAN but your tax is deducted, the rate of Tax deduction would be @20% regardless of your income slab or the nature of income.
That means if your TDS is deducted on income such as salary, interest, professional fees etc.and you do not have PAN, the rate of TDS would be 20% on the total amount.
This is regardless of the prescribed rates for deduction of TDS, if you have PAN. The rate of TDS for interest income is 10%, professional fees is also 10% whereas for salary it is calculated as per income tax slabs and is lower than 10% for salaries upto Rs.8,50,000/- generally.
The other big disadvantage is that you cannot get the benefit of this TDS as the credit does not reach your account in absence of PAN.
Even if you feel that the TDS is more, you should get the credit by giving your PAN and get the refund from IT department when you file your ITR.
What happens if you do not have the PAN and your tax is deducted.
If you do not have PAN but your tax is deducted, the rate of Tax deduction would be @20% regardless of your income slab or the nature of income.
That means if your TDS is deducted on income such as salary, interest, professional fees etc.and you do not have PAN, the rate of TDS would be 20% on the total amount.
This is regardless of the prescribed rates for deduction of TDS, if you have PAN. The rate of TDS for interest income is 10%, professional fees is also 10% whereas for salary it is calculated as per income tax slabs and is lower than 10% for salaries upto Rs.8,50,000/- generally.
The other big disadvantage is that you cannot get the benefit of this TDS as the credit does not reach your account in absence of PAN.
Even if you feel that the TDS is more, you should get the credit by giving your PAN and get the refund from IT department when you file your ITR.
These are my personal views and should not be considered as legal advise. You are requested to consult a professional before acting on this blog.
For any query / suggestion on my blogs, feel free to write to me at piyushsgarg@gmail.com.
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