Article explains Consequence on non-furnishing of PAN by non-resident to Deductor who is required to deduct or withhold tax on income of non-resident. Article explains in such cases Rate of Tax Deduction, Rate in case of interest, royalty, fees for technical services, dividend and payments on transfer of any capital assets, TDS rate if Payment is subject to TDS u/s 194LC (interest on long-term bonds). If further explains its impact on application for lower withholding certificate.
| Particulars | PAN furnished by non-resident | Non-furnishing of PAN by non-resident |
|---|---|---|
| Rate of TDS | Tax shall be deducted at the rate in force. | TDS rate should be higher of following:
1. at the rate or rates in force; or 2. at the rate of 20% |
| Rate in case of interest, royalty, fees for technical services, dividend and payments on transfer of any capital assets | Rate in force.
a. Royalty–10% / 15% b. FTS – 10%/ 15% c. Dividend – 10% d. Capital Gain – 10%/ 20% |
Rate in force, subject to furnishing of following details/ documents:
|
| Payment is subject to TDS u/s 194LC (interest on long-term bonds) | Rate as per section 194LC. | Rate as per section 194LC (No adverse consequences in such case). |
| Lower withholding certificate | Deductee can apply by quoting the PAN. | Cannot obtain lower TDS certificate without quoting PAN. |
| Consequence of Non filling of ITR for 2 consecutive years | Not applicable in case of non-resident. | Not applicable in case of non-resident. |
