Section 206AA

Benefit to Non- Residents under Income Tax Act,1961

Income Tax - Articles explain who is Non-Resident Individual, Partnership firm, Company for Income Tax Purpose, Taxable Income of Non Residents, Tax on Indirect transfer of a capital asset situated in India by Non-Residents, activities not to constitute business connection in India, Exemption from applicability of Section 206AA to non-residents...

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FAQs on Tax Deducted at Source (TDS)

Income Tax - 1) Whether capitalization of interest payable attracts TDS U/S 194A? Whether conversion of out standing interest on loan into loan attracts TDS? Difference between Form-15G and Form-15H? Difference between TDS and TCS? What is due date for remittance of TDS certificates? (Form-16 and Form-16A)...

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All about Section 206AA read with Rule 37BC & recent Changes

Income Tax - All about Section 206AA of Income Tax Act, 1961 to be read with Rule 37BC of Income Tax Rules, 1962 alognwith recent changes as applicable from 24th June 2016 after considering the amendment effected by Notification No. 53/2016-Income Tax dated: 24.06.2016. Section-206AA Analysis (1) Notwithstanding anything contained in any other provisi...

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8 Income Tax Provisions Applicable from 1st June 2016

Income Tax - (i) Amendment relating to Advance Tax (The change is effective from financial year 2016-17 onwards) The schedule for payment of Advance Tax by an Individual and other non-corporate assessee has been amended w.e.f. 1st June 2016 as under: ...

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Exemption from PAN furnishing U/s. 206AA to certain non-resident

Income Tax - In order to reduce compliance burden, it is proposed to amend the said section 206AA so as to provide that the provisions of this section shall also not apply to a non-resident, not being a company, or to a foreign company, in respect of any other payment, other than interest on bonds, subject to such conditions as may be prescribed....

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Exempt Non-Residents Having TIN from Applicability of TDS at Higher Rate U/s. 206AA

Income Tax - Under the current provisions of Section 206AA, tax is required to be deducted by the deductor at a higher rate as prescribed under the said section, where the deductee does not furnish his Permanent Account Number (PAN). This section was introduced with the objective that the furnishing of PAN was important with a view to trail the taxabi...

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Rationalisation of Withholding tax on interest payments on borrowings of Infrastructure Debt Funds

Income Tax - Rationalisation of With-Holding Tax (WHT) to Encourage Greater Subscription in Indian Debt Securities by Foreign Investors, Encourage Development of the Indian Debt Market and Accelerate the Pace of Growth of the Indian Economy. ...

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Reminder : Person receiving income subject to withholding tax is required to obtain Permanent Account Number (PAN)

Income Tax - The Finance (No.2) Act of 2009 introduced section 206AA under the Income Tax Act, 1961 (the ITA) to provide that any person who is entitled to receive any sum or income or amount, on which tax is to be withheld under the ITA shall furnish PAN to the person responsible for withholding of tax. In case PAN is not furnished, minimum withholdi...

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With effect from 1 April 2010 higher rate of tax applies for tax withholding where PAN is not provided

Income Tax - The Finance Act, 2009 introduced new provisions (section 206AA) in the Income-tax Act, 1961 (the Act). As per these provisions any person entitled to receive any sum on which tax is deductible under the Act shall furnish its Permanent Account Number (PAN) to the deductor. In case of failure in providing PAN to the deductor, the deductor i...

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New Pan Provisions Very Harsh; Even non- residents need to Comply new provisions

Income Tax - PAN is the basic ‘penetrating needle’ for the Income tax Department to rope in every income earning person. It is a fact that our taxbase continues to be a major concern for policy makers. And in order to widen the taxpayers’ base the I-T Department intends to ride the vehicle of PAN in a big […]...

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ITAT Special Bench on Section 206AA– dissenting view on tax rate

Nagarjuna Fertilizers and Chemicals Limited Vs ACIT (ITAT Hyderabad) - Recently ITAT-SB at Hyderabad in Nagarjuna’s case held that even if a non resident does not obtain a PAN, the tax deductor need not deduct TDS at higher rate of 20%....

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Section 206AA not overrides other provisions of Income Tax Act, 1961

Nagarjuna Fertilizers and Chemicals Limited Vs ACIT (ITAT Hyderabad) - Assessee cannot be held liable to deduct tax at higher of the rates prescribed in section 206AA in case of payments made to non-resident persons having taxable income in India in spite of their failure to furnish the Permanent Account Numbers....

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Sec.206AA–Higher TDS not valid where benefit of DTAA available

M/s. Wipro Ltd. Vs ITO (ITAT Bangalore) - n this case, it was held that it is not a simple case of deduction of tax at source by applying the rate only as per the provisions of Act, when the benefit of DTAA is available to the recipient. Therefore, the question of applying the rate of 20% as provided u/s 206AA is an issue which requires a l...

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Clash of titans, sec 192 Vs sec 206AA

Rashtriya Ispat Nigam Ltd. Vs Addl CIT (TDS), (ITAT Visakhapatnam) - Rashtriya Ispat Nigam Ltd. v. Addl CIT (TDS), ITAT Visakhapatnam) Even if there is no PAN, if the deductor has deducted TDS as per provisions of sec 192, Section 206AA does not over-ride section 192 in terms of the requirement of “at the rates specified in the relevant provisions of the Act....

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Wrong PAN in TDS Return- Assessee cannot be penalised if system do not allow PAN correction in TDS Return

Oil & Natural Gas Corporation Ltd. Vs DCIT CPC-TDS (ITAT Ahmedabad) - In the case of Oil & Natural Gas Corporation Ltd. Vs. DCIT CPC-TDS, assessee was required to deduct tax and has deducted TDS @ 2% of sum paid/credited to GETCO Ltd. but due to filing of wrong PAN of deductee it has been deemed as assessee in default and accordingly 18% of remaining ...

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Relaxation from deduction of tax at higher rate U/s. 206AA

Notification No. 53/2016-Income Tax - (24/06/2016) - 37BC. Relaxation from deduction of tax at higher rate under section 206AA.– (1) In the case of a non-resident, not being a company, or a foreign company and not having PAN the provisions of section 206AA shall not apply in respect of payments in the nature of interest, royalty, fees for technical ...

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Recent Posts in "Section 206AA"

ITAT Special Bench on Section 206AA– dissenting view on tax rate

Nagarjuna Fertilizers and Chemicals Limited Vs ACIT (ITAT Hyderabad)

Recently ITAT-SB at Hyderabad in Nagarjuna’s case held that even if a non resident does not obtain a PAN, the tax deductor need not deduct TDS at higher rate of 20%....

Read More

Section 206AA not overrides other provisions of Income Tax Act, 1961

Nagarjuna Fertilizers and Chemicals Limited Vs ACIT (ITAT Hyderabad)

Assessee cannot be held liable to deduct tax at higher of the rates prescribed in section 206AA in case of payments made to non-resident persons having taxable income in India in spite of their failure to furnish the Permanent Account Numbers....

Read More

Benefit to Non- Residents under Income Tax Act,1961

Articles explain who is Non-Resident Individual, Partnership firm, Company for Income Tax Purpose, Taxable Income of Non Residents, Tax on Indirect transfer of a capital asset situated in India by Non-Residents, activities not to constitute business connection in India, Exemption from applicability of Section 206AA to non-residents...

Read More
Posted Under: Income Tax | ,

FAQs on Tax Deducted at Source (TDS)

1) Whether capitalization of interest payable attracts TDS U/S 194A? Whether conversion of out standing interest on loan into loan attracts TDS? Difference between Form-15G and Form-15H? Difference between TDS and TCS? What is due date for remittance of TDS certificates? (Form-16 and Form-16A)...

Read More
Posted Under: Income Tax | ,

All about Section 206AA read with Rule 37BC & recent Changes

All about Section 206AA of Income Tax Act, 1961 to be read with Rule 37BC of Income Tax Rules, 1962 alognwith recent changes as applicable from 24th June 2016 after considering the amendment effected by Notification No. 53/2016-Income Tax dated: 24.06.2016. Section-206AA Analysis (1) Notwithstanding anything contained in any other provisi...

Read More
Posted Under: Income Tax |

Relaxation from deduction of tax at higher rate U/s. 206AA

Notification No. 53/2016-Income Tax (24/06/2016)

37BC. Relaxation from deduction of tax at higher rate under section 206AA.– (1) In the case of a non-resident, not being a company, or a foreign company and not having PAN the provisions of section 206AA shall not apply in respect of payments in the nature of interest, royalty, fees for technical services and payments on transfer of any...

Read More

8 Income Tax Provisions Applicable from 1st June 2016

(i) Amendment relating to Advance Tax (The change is effective from financial year 2016-17 onwards) The schedule for payment of Advance Tax by an Individual and other non-corporate assessee has been amended w.e.f. 1st June 2016 as under: ...

Read More
Posted Under: Income Tax | ,

Sec.206AA–Higher TDS not valid where benefit of DTAA available

M/s. Wipro Ltd. Vs ITO (ITAT Bangalore)

n this case, it was held that it is not a simple case of deduction of tax at source by applying the rate only as per the provisions of Act, when the benefit of DTAA is available to the recipient. Therefore, the question of applying the rate of 20% as provided u/s 206AA is an issue which requires a long drawn reasoning and finding. ...

Read More

Exemption from PAN furnishing U/s. 206AA to certain non-resident

In order to reduce compliance burden, it is proposed to amend the said section 206AA so as to provide that the provisions of this section shall also not apply to a non-resident, not being a company, or to a foreign company, in respect of any other payment, other than interest on bonds, subject to such conditions as may be prescribed....

Read More
Posted Under: Income Tax |

Clash of titans, sec 192 Vs sec 206AA

Rashtriya Ispat Nigam Ltd. Vs Addl CIT (TDS), (ITAT Visakhapatnam)

Rashtriya Ispat Nigam Ltd. v. Addl CIT (TDS), ITAT Visakhapatnam) Even if there is no PAN, if the deductor has deducted TDS as per provisions of sec 192, Section 206AA does not over-ride section 192 in terms of the requirement of “at the rates specified in the relevant provisions of the Act....

Read More
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