Answer

1. F

   Facts

   CBDT has given relief in the past where a deductee's PAN became operative by a set date, so the deductor was not treated as short deducting. Whether relief applies depends on the circular for that period.

2. P

   Provisions and law

   • Sec 206AA, Income-tax Act 1961 (now Sec 397(2), Income-tax Act 2025)Higher TDS, generally 20%, where the deductee has no valid or operative PAN
   • Sec 201, Income-tax Act 1961 (now Sec 398, Income-tax Act 2025)A deductor who fails to deduct or pay TDS is treated as an assessee in default
   • CBDT Circular No. 03 of 2023From 1 July 2023 an inoperative PAN gets no refund, no interest on refund, and higher TDS and TCS
3. A

   Analysis

   Example: a vendor's PAN was inoperative when you paid ₹2 lakh and you deducted at 10%; TRACES shows a short deduction at 20%. If a circular covers that period and the vendor linked within the allowed date, the default can be removed on processing. If not, pay the difference with interest. Keep track of vendor PAN status before each payment.

4. C

   Conclusion

   1. 1Check the payment date and the vendor's linking date
   2. 2Read the CBDT circular for that period
   3. 3If relief applies, request reprocessing on TRACES
   4. 4If not, pay the shortfall with interest

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.