CBDT Circular 9/2025 PAN Aadhaar TDS Relief:
Circular No. 9/2025 ; F. No. 275/04/2024- IT(B) (modification of circular No. 3 of 2023)
Existing provision:
Prior to this circular, several grievances have been received whereby tax deductors received tax demands to deduct higher rate of TDS in case deductee’s PAN was deemed inoperative on account of non linkage with Aadhar as per rule 114AAA of the income tax rules which came into effect from 1st July 2023 along with interest on short deduction if TDS was previously deducted at normal rates in force.
Relief provided by circular earlier (Circular No. 6/2024):
This circular dated 23/04/2024 provided relief to deductors/collectors from the applicability of higher TDS/TCS rates under section 206AA/206CC of the Income-tax Act, 1961 for transactions entered into upto 31/03/2024, where the PAN becomes operative (as a result of linkage with Aadhaar) on or before 31/05/2024.
Further relief provided by circular (Circular No. 9/2025):
This circular dated 21/07/2025 states that there shall be no liability on the deductor/collector to deduct/collect the tax under section 206AA/206CC of the Act, as the case maybe, in the following cases:
- For payments/credits made from 01/04/2024 to 31/07/2025 – If the PAN becomes operative on or before 30/09/2025 (i.e., linked with Aadhaar), normal TDS/TCS rates shall apply.
- For payments/credits made on or after 01/08/2025 – If the PAN is made operative within 2 months from the end of the month in which the transaction took place, the deductor/collector shall not be liable to deduct/collect tax at the higher rate.
Examples to explain above:
| Transaction Date | PAN linkage date | Relief Available | TDS/TCS Rate Applicable |
| 01/04/24 to 31/07/25 | On or before 30/09/25 | Yes | Normal rate |
| 01/04/24 to 31/07/25 | After 30/09/25 | No | Higher rate 206AA/206CC |
| On or after 01/08/25 | Within 2 months from the end of transaction month | Yes | Normal rate |
| On or after 01/08/25 | After 2 months window | No | Higher rate 206AA/206CC |
Deductors and taxpayers are advised to ensure PAN-Aadhaar linkage is completed in time to avoid the risk of demands for short deduction or collection. The key deadlines are 30th September 2025 and a 2-month window for transactions from 1st August 2025 onwards.
CBDT Circular 9/2025 PAN Aadhaar TDS Relief
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