Question
My deductor says they will cut higher TDS because of PAN. What is the rate if PAN is not given or is inoperative?
Answer
If you do not furnish a valid PAN, TDS is deducted at 20% or the normal applicable rate, whichever is higher. From 1 April 2026 this higher-deduction rule sits under Section 397(2) of the Income-tax Act 2025, which merges the earlier Sections 206AA and 206CC. A PAN that is inoperative because it is not linked to Aadhaar is treated the same as having no PAN, so the same higher rate applies. Excess TDS can be reclaimed only by filing your ITR. Estimate deductions with our TDS calculator.
This answer is general information based on the law as it stood when written and is not professional advice on your specific situation. Verify the current position and consult a qualified professional before acting. See our disclaimer.