New Delhi, July 22 -- The Central Board of Direct Taxes (CBDT) has issued a fresh circular modifying earlier guidelines on the consequences of Permanent Account Number (PAN) becoming inoperative under Rule 114AAA of the Income-tax Rules, 1962. The move provides relief to tax deductors and collectors facing notices for short deduction or collection of TDS/TCS.

As per Circular No. 3 of 2023, PANs that were not linked with Aadhaar became inoperative from July 1, 2023, attracting higher TDS/TCS rates under Sections 206AA and 206CC of the Income-tax Act, 1961. Relief was later provided through Circular No. 6 of 2024 for transactions till March 31, 2024, where PANs were made operative on or before May 31, 2024.

However, taxpayers continued to...