PAN-Aadhaar linkage check (Section 206AA)

From 1 July 2023, an unlinked PAN becomes inoperative. Under Section 206AA, inoperative PAN attracts TDS at the higher of (a) rate in force, (b) 20%, or (c) section-specified rate.

Automatic check

ThynkTax checks every deductee's PAN-Aadhaar status against the income tax API:

• At deductee creation - immediate check
• Monthly batch - re-verify all active deductees on the 1st of each month
• Before TDS deduction - if status is "inoperative", warn the user

What to do if inoperative

1. Notify the deductee - they need to link PAN-Aadhaar at incometaxindia.gov.in (₹1,000 fee).
2. Hold the deduction at the higher rate - until linkage is confirmed, deduct at the Section 206AA rate.
3. No subsequent refund - if the deductee later links PAN-Aadhaar, the excess TDS already deducted is not refundable to the deductor; the deductee claims credit in their ITR.

Section 206AA scenarios