New Delhi: As per a recent circular by the Central Board of Direct Taxes, employers will have to deduct a Tax Deducted at Source (TDS) of 20 per cent from salaries of employees who have not furnished their Permanent Account Number (PAN) and Aadhaar details. This new rule will be applicable to those whose annual salary is above Rs 2.5 lakhs.
According to Section 206AA of the Income Tax Act, furnishing of PAN or Aadhar is mandatory for employees whose income is taxable.
The employer is responsible to make Tax Deduction at Source (TDS) from their employee's taxable income. If the employee has not furnished their PAN or Aadhar card then the employer can deduct 20 per cent from the employee's salary.
