Relaxation from higher TDS/TCS in PAN Inoperative cases

Key Highlights of Circular No. 9/2025

1. Purpose

The circular partially modifies Circular No. 3/2023, which addressed consequences of a PAN becoming inoperative under Rule 114AAA of the Income-tax Rules. It provides relief to deductors and collectors who received notices for short deduction or collection of TDS/TCS due to inoperative PANs.

2. Relief Measures

• For payments/credits from 1 April 2024 to 31 July 2025:
  If the PAN is made operative by linking with Aadhaar on or before 30 September 2025, no higher TDS/TCS rate under Section 206AA / Section 206CC will apply.

• For payments/credits on or after 1 August 2025:
  Relief is extended if the PAN becomes operative (linked to Aadhaar) within two months from the end of the month in which the payment or credit occurred

In both circumstances, regular (standard) TDS/TCS rates as per the Act will apply instead of penal higher rates.

3. Scope & Impact

• Addresses automated demands raised under Sections 200A or Section 206CB for “short-deduction/collection” when PAN was inoperative, even if rectified shortly thereafter,

• Grievances stemmed from system-generated notices that failed to account for PAN becoming operative post-transaction.

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✅ Summary Table

Period	PAN operative by	Higher TDS/TCS avoided?
April 1, 2024 – July 31, 2025	By September 30, 2025	Yes (relief granted)
From August 1, 2025	Within two months after transaction month	Yes (relief granted)

 

Section 80DDB of The Income Tax Act, 1961 - Deduction in respect of medical treatment, etc

 

Applicable Provisions:

1. Section 80DDB of The Income Tax Act, 1961 - Deduction in respect of medical treatment, etc
2. Rule 11DD of The Income Tax Rules, 1962 - Specified diseases and ailments for the purpose of deduction under section 80DDB
3. Form No - 10-I - Certificate of prescribed authority for the purposes of Section 80DDB-Omitted

Eligibility:

1. Resident Assessee actually paid for the treatment of the specified diseases during the previous year.
2. In case of Individual Assessee, treatment for himself or any of his dependent is eligible for deduction.
3. In case of HUF, treatment for any member of a Hindu undivided family is eligible for deduction.
4. Prescription from the specialists must be obtained for claiming the deduction
5. Eligible claim must be reduced by the amount received, if any, under an insurance from an insurer, or reimbursed by an employer for the Treatment.

Specified Diseases:

(i) Neurological Diseases where the disability level has been certified to be of 40% and above,—

1. Dementia ;
2. Dystonia Musculorum Deformans ;
3. Motor Neuron Disease ;
4. Ataxia ;
5. Chorea ;
6. Hemiballismus ;
7. Aphasia ;
8. Parkinsons Disease ;

(ii)  Malignant Cancers ;
(iii) Full Blown Acquired Immuno-Deficiency Syndrome (AIDS) ;
(iv) Chronic Renal failure ;

(v)  Hematological disorders :

1. Hemophilia ;
2. Thalassaemia.

Prescriptions by Doctors/ Hospitals:

The prescription in respect of the diseases or ailments specified in sub-rule (1) shall be issued by the following specialists:—

1. for diseases or ailments mentioned in clause (i) of sub-rule (1) – a Neurologist having a Doctorate of Medicine (D.M.) degree in Neurology or any equivalent degree, which is recognised by the Medical Council of India;
2. for diseases or ailments mentioned in clause (ii) of sub-rule (1) – an Oncologist having a Doctorate of Medicine (D.M.) degree in Oncology or any equivalent degree which is recognised by the Medical Council of India;
3. for diseases or ailments mentioned in clause (iii) of sub-rule (1) – any specialist having a post-graduate degree in General or Internal Medicine, or any equivalent degree which is recognised by the Medical Council of India;
4. for diseases or ailments mentioned in clause (iv) of sub-rule (1) – a Nephrologist having a Doctorate of Medicine (D.M.) degree in Nehprology or a Urologist having a Master of Chirurgiae (M.Ch.) degree in Urology or any equivalent degree, which is recognised by the Medical Council of India;
5. for diseases or ailments mentioned in clause (v) of sub-rule (1) – a specialist having a Doctorate of Medicine (D.M.) degree in Hematology or any equivalent degree, which is recognised by the Medical Council of India :

Notes:

1. If the patient is receiving the treatment in a Government hospital, the prescription may be issued by any specialist working full-time in that hospital and having a post-graduate degree in General or Internal Medicine or any equivalent degree, which is recognised by the Medical Council of India.
2. The prescription shall contain the name and age of the patient, name of the disease or ailment along with the name, address, registration number and the qualification of the specialist issuing the prescription:
3. Where the patient is receiving the treatment in a Government hospital, such prescription shall also contain the name and address of the Government hospital

Dependents:

1. In the case of an individual, the spouse, children, parents, brothers and sisters of the individual or any of them,
2. In the case of a Hindu undivided family, a member of the Hindu undivided family,
3. Dependent wholly or mainly on such individual or Hindu undivided family for his support and maintenance;

Eligible Amount of Deduction:

1. If patient is a senior citizen, deduction allowable will be LOWER of Rs. 1,00,000 or amount actually paid for treatment during the year.
2. In case of Others, deduction allowable will be LOWER of Rs. 40,000 or amount actually paid for treatment during the year.
3. "senior citizen" means an individual resident in India who is of the age of sixty years or more at any time during the relevant previous year.

Documentation:

1. Prescription issued by the Specialist
2. Copy of PAN of the dependent
3. Copy of Aadhaar of the dependent
4. Medical Bills

Applicability of E-Invoicing under GST w.e.f 1st August, 2023

GST Update-2/2023

E-invoice:

Under e-invoicing system, all business-to-business invoices shall be prepared digitally by including such particulars as contained in FORM GST INV-01 after obtaining an invoice reference number by uploading information contained therein on the Common Portal in such manner and subject to conditions and restrictions as may be specified in the notification.

Rules:

Sub-rule (4) of the rule 48 of the Central Goods and Service Tax Rules, 2017, such class of registered persons, as notified by the Central Government on the recommendation of the Council, shall be required to prepare e-invoices in respect of supply of goods or services or both to a registered person [or for exports].

Invoices: 

Applicable to B2B invoices only. All business to business invoices issued by the notified registered persons shall be covered under this rule. 

Persons required to prepare E-invoices: 

E-invoicing is applicable to all registered persons, other than [a SEZ unit] and those referred to in sub-rules (2), (3), (4), and (4A) of Rule 54 of the Central Goods and Service Tax Rules, 2017, whose aggregate turnover in any preceding financial year from 2017-18 onwards exceeds 5 crore rupees.

Turnover Limit:

E-invoicing is applicable to all notified registered persons having aggregate turnover in any preceding financial year from 2017-18 onwards exceeds 5 Crore rupees as per Notification-10/2023- Central Tax - dated - 10th May, 2023.

Currently, threshold limit is the aggregate turnover exceeds 10 Crore rupees till 31st July, 2023.

Effective Date:

The new turnover limit will be applicable with effect from 1st August, 2023.

Rationalisation of late fee for GSTR-9 and Amnesty to GSTR-9 non-filers:

 Maximum Late fee:

Financial Year 2022-23 onwards:

• Aggregate Turnover up to 5 Crores in the relevant FY = Rs. 25/day of default up to 0.02% of Turnover in the State /UT (under CGST) + Rs. 25/day of default up to 0.02% of Turnover in the State /UT (under SGST/UTGST)

• Aggregate Turnover more than 5 Crores but less than 20 Crores in the relevant FY = Rs. 50/day of default up to 0.02% of Turnover in the State /UT (Under CGST)+ Rs. 50/day of default up to 0.02% of Turnover in the State /UT (Under SGST/UTGST)

For FY 2017-18 to FY 2021-22:

• Not filed GSTR9 on or before 31-03-2023 but filed the same within the period of 01-04-2023 to 30-06-2023, maximum late fee will be Rs. 10,000 (CGST) + Rs. 10,000 (SGST/UTGST).

Mandatory e-filing of FORM 10F:

 

1. Extended the exemption given till 30/09/2023. Previously it is exempted till 31/03/2023.
2. Applicable to Non-resident tax payers:

• who want to claim benefits under DTAA
• who were not having PAN
• not required to have PAN

        under the Income Tax Act, 1961 read with rules thereunder.

   3. These tax payers can file FORM 10F manually.

PAN - Aadhaar Linking

 As per Income-tax Act, 1961, it is mandatory for all PAN holders,
other than exempted category, to link their PAN with Aadhaar before 30.06.2023.

Link your PAN with AADHAAR with a late fee of Rs. 1,000 on or before 30-06-2023; otherwise PAN will be inoperative with effect from 01-07-2023.