If you earn Rs 2.5 lakh per annum and have not provided your PAN and Aadhaar details to your employer, you are likely to be in trouble if you fail to act soon.
The Income Tax Department has asked employers to deduct 20 per cent salary as Tax Deducted at Source (TDS) from all employees who fail to furnish Pan and Aadhaar details.
This rule was formulated by the Central Board of Direct Taxes (CBDT) and came into effect on January 16.
The rule will be applicable to those who earn more than Rs 2.5 lakh per annum. This rule is aimed at keeping a close eye on TDS payments and revenue earned by this segment. In the financial year 2018-19, revenue from this segment amounted to around 37 per cent of the total direct tax collection.
In its 86-page page circular, the CBDT has said employees have to quote PAN and Aadhaar details compulsorily as per the Section 206-AA of the Income-Tax Act.
The circular reads, "Section 206AA in the Act makes furnishing of PAN or Aadhaar number, as the case may be, by the employee compulsory in case of receipt of any sum or income of amount, on which tax is deductible."
The circular also states that if an employee fails to provide these details, the employer is responsible to make deductions either at the tax rate on the employee's salary or 20 per cent or above.