20% TDS for PAN Aadhaar not linked | 26QB

This query is : Resolved

Abhay Kamath (Querist)
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05 June 2024 Dear All,

We purchased a flat this year
Agreement happened on 18th April 2024
26QB TDS was paid @1% (1.7 lakhs) on 18th April 2024

We started received short deduction notices. Turns out seller's Aadhaar and PAN were not linked. Hence, PAN was showing inoperative.

They completed linking it on 24th May 2024

Now, we are still getting deduction notices. Since sale value was 1.7 crore, we won't be able to pay 20% TDS (34 lakhs) since we have already got home loan (disbursed and EMI started)

We are not sure if seller will be able to pay or not. CA mentioned that as per CBDT if TDS was paid by 31st Mar 2024 and PAN Aadhaar linking was done by 31st May 2024, there is relief. Our TDS payment was done on 18th Apr 2024.

Is there a way out of this? Can we appeal to ITR department for relief?

Kindly advise, thanks in advance

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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06 July 2024 Given the situation you've described, here are the steps and considerations you should keep in mind regarding the TDS (Tax Deducted at Source) issue on your property purchase:

1. **PAN and Aadhaar Linking:**
- The linking of PAN with Aadhaar by the seller by 31st May 2024 is crucial as per CBDT (Central Board of Direct Taxes) notifications. This linkage is necessary for the TDS to be considered valid.

2. **TDS Payment Date:**
- You have mentioned that TDS payment (26QB) was done on 18th April 2024. According to CBDT guidelines, for relief purposes, the TDS should have been paid by 31st March 2024 and the PAN-Aadhaar linking completed by 31st May 2024.

3. **Short Deduction Notices:**
- Despite the TDS payment and subsequent linking of PAN with Aadhaar, if you are still receiving short deduction notices, it could be due to processing delays or issues on the department's end.

4. **Seeking Relief:**
- Yes, you can certainly appeal or seek relief from the Income Tax Department (ITR department) regarding this matter. You should gather all relevant documents:
- Copy of the TDS payment challan (26QB) dated 18th April 2024.
- Proof of seller's PAN and Aadhaar linkage completed by 24th May 2024.
- Copies of the short deduction notices received.

5. **Procedure for Appeal:**
- Contact a tax professional or CA who can assist you in preparing a formal request or appeal to the Income Tax Department explaining the situation.
- Provide all necessary documents and evidence to support your case, demonstrating that TDS was paid within the stipulated timeframe as per CBDT guidelines.

6. **Follow-Up:**
- Follow up with the Income Tax Department on the status of your appeal or request for relief. Ensure all communication is documented and maintained for future reference.

7. **Consultation:**
- If needed, consult with a tax advisor who can provide guidance specific to your case and assist in navigating any further steps required for resolution.

By taking these steps and ensuring proper documentation, you can effectively address the issue of TDS on your property purchase and seek relief as per applicable tax laws and guidelines.