What can be the reason for employees' tax being deducted at a higher rate?

Created by Product Content Team, Modified on Thu, 19 Jun at 5:47 PM by Product Content Team

The employee's tax is deducted at a higher rate if the admin does not capture the PAN-Aadhaar linked status of the employee.

According to the Income Tax Act, it is mandatory to link the PAN with Aadhaar. If the admin fails to update within the deadline the PAN status becomes inoperative.

The Income Tax Department applies a higher rate of TDS deduction to employees with an inoperative PAN. This rate is usually the maximum allowable rate for that income type, which is either 20% or higher.

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