If Aadhaar card-PAN is not linked, 20 per cent TDS will be levied from July 1

- Antenna: Vivek Mehta

- Failure to link Aadhaar Card and PAN Card will put a brake on your financial transactions including credit card payments, online banking

If the PAN card is not linked with the Aadhaar card before June 30, 50 per cent of your interest income is likely to be deducted as TDS. Once more tax is deducted in tax deduction than normal, then the tax will be deducted accordingly throughout the year. It is then likely that the request made by the taxpayer in this regard will not be accepted. Finally, at the time of filing the income tax return, you will have to apply for an additional tax deduction refund. TDS can be levied at the rate of 50% on interest income, interest income on fixed deposits and dividend income. Plus, you'll be getting rid of clutter you don't need. Debit card and credit card payment systems are also likely to be disrupted. Mobile banking, credit card payments, online payments and UPI payments are also likely to be hampered. Even the payment or ECS of your systematic investment plan cannot be ruled out. If you do not link your permanent account number and your Aadhaar card number, understand that all these problems will come to your doorstep. Trading in your demat account is also likely to take a break. In these circumstances everyone should first take care to link their Aadhaar card and demat account.

Income tax rules have been changed. Under this rule, it has been made mandatory to link Arcard and PAN card by June 30. If PAN card and Aadhaar card are not linked then only your bank account will be considered as illegal. Your bank account will be deemed illegal under the provision made in Rule No. 114 (AAA) of Income Tax Act-121. This rule will be implemented from July 1, 2021. As per the provision made in Section 306AA (2) of the Income Tax Act, if the permanent account number given to the taxpayer is illegal or inactive, then the person from whose account the tax is to be deducted has not provided the permanent account number to the tax deductor. Therefore, as per the provision made in its sub-section 302AA (1), its economic transactions will be tax deductible at the rate of 50%.

In these circumstances, the permanent account number will be deemed inactive as a result of not linking with the Aadhaar card as per the provision made in Rule No. 114AAA (2). However, your business will be tax deductible at the rate of 50%. This provision has been made in Section 307AA of the Income Tax Act.

Taxpayer's interest on fixed deposit, dividend income will be tax deductible at the rate of 50%.

Deductions are the responsibility of the payer. Once the Aadhaar card and PAN card are linked, you have to inform the concerned authorities i.e. the bank post office about the interest income. If you have placed a fixed deposit in companies, you will also have to inform them that Aadhaar card and PAN card have been linked. In the same way, if you are receiving dividends from a mutual fund, you should also inform the asset management companies. You need to let them know that you do not have to deduct 50% of the interest on your fixed deposit or your dividend income. This way you will be able to avoid 20% tax deduction and avoid the problem of not linking PAN card and Aadhaar card. Therefore, it is in your interest to get the Aadhaar card and PAN card linked before June 30.

Once the payer starts deducting tax at a higher rate, i.e. 50 per cent, then he may not be able to deduct at a lower rate for the rest of the financial year.