Get ready to pay 20% of your salary as TDS if you fail to provide PAN, Aadhaar details

New Delhi, Jan 25: If you earn Rs 2.5 lakh per annum and have not provided your PAN and Aadhaar details to your employer, be ready to pay 20 per cent of your salary as Tax Deducted at Source (TDS).

The CBDT (Central Board of Direct Taxes) rules, which came into effect on January 16, will be applicable for all those who earn above Rs 2.5 lakh per annum.

As per the circular issued by the CBDT, employees have to quote PAN and Aadhaar details compulsorily as per the Section 206-AA of the Income Tax Act.

"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 reads.

In case an employee fails to provide the required details, the employer is responsible to make deductions either at the tax rate on the employee's salary or 20 per cent or above.

If your income is below Rs 2.5 lakh per annum, no tax will be deducted. After several deductions, if the salary attracts approx 20 per cent tax, the TDS rate of 20 per cent will apply.