Answer

1. F

   Facts

   With an inoperative PAN, deductors must apply the higher rate under Sec 397(2) of the Income-tax Act 2025 (old Sec 206AA), generally 20%. Linking makes the PAN operative and normal rates apply again.

2. P

   Provisions and law

   • Sec 397(2), Income-tax Act 2025 (old Sec 206AA)Higher TDS where the deductee has no valid or operative PAN
   • Sec 262, Income-tax Act 2025 (old Sec 139AA)PAN and Aadhaar linking requirement continues under the new Act
   • 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

   The extra TDS is not lost; it shows in your Form 168 (old Form 26AS) and can be claimed in your return. Example: FD interest of ₹1,00,000 with TDS at 20% instead of 10% means ₹10,000 extra deducted, which comes back as a refund once the PAN is operative. Tell the bank after linking so it updates its records.

4. C

   Conclusion

   1. 1Link PAN and Aadhaar
   2. 2Confirm the status shows operative
   3. 3Inform your bank, employer or broker
   4. 4Claim the extra TDS in your return

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