ITR
Salary TDS higher because PAN is not linked
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Facts
Yes. Salary TDS also falls under the higher rate rule where the employee's PAN is inoperative. The higher rate under Sec 397(2) of the Income-tax Act 2025 (old Sec 206AA) applies unless the PAN is made operative.
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
Analysis
For salary, the higher rate compares 20% with the average rate. Example: an employee whose normal TDS is ₹4,000 a month may see far more deducted. Linking ends this from the next payroll after the PAN is operative. Extra TDS can be claimed as a refund in your return.
Conclusion
- Link PAN and Aadhaar immediately
- Share the link confirmation with HR
- Ask payroll to apply normal rates once operative
- Claim extra TDS in your return
A Savvy can do this for you
PAN-Aadhaar linking with late fee, Sec 262 and 430 (old 139AA and 234H)
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