In order to avoid paying taxes at a higher rate, the income tax administration requested on Tuesday that people connect their PAN with Aadhaar by May 31. Income tax regulations stipulate that TDS must be deducted at double the relevant rate in cases where a Permanent Account Number (PAN) is not connected to the biometric Aadhaar system.

The income tax department published a circular last month informing taxpayers that if they link their PAN to Aadhaar by May 31, there will be no action taken about the short deduction of TDS.

"Please link your PAN with Aadhaar before May 31, 2024, if you haven't already, in order to avoid tax deduction at a higher rate," the department stated on X.

The IT department requested in a different post that reporting entities—such as banks and FX dealers—submit SFT by May 31 in order to avoid fines.

"May 31, 2024 is the deadline for filing SFTs (Statements of Specified Financial Transactions). Accurate and timely submission can help you avoid fines," the government stated. The following reporting entities must file SFT reports with the tax authorities: banks, sub-registrars, NBFCs, post offices, issuers of bonds and debentures, trustees of mutual funds, companies that pay dividends or buy back shares, and forex dealers. 

The information about specific financial transactions or any reportable account that these designated institutions registered, documented, or kept during the year must be provided. 

Penalties for late SFT return submission might reach Rs 1,000 per day of noncompliance. Inaccurate or non-filing statements may also result in penalties.  The income tax department tracks high-value transactions that a person makes through SFT.