Income Tax : This guide explains the tax exemptions, concessional tax rates, presumptive taxation schemes, and compliance benefits available to...
Income Tax : This comprehensive FAQ explains the TDS provisions applicable for AY 2026-27, including rates, thresholds, compliance obligations,...
Income Tax : This guide explains when Section 206AA requires TDS at a higher rate due to non-furnishing of PAN and the applicable exceptions. I...
Income Tax : Learn how TDS on rent is governed under Sections 194-I and 194-IB, including eligibility, deduction rates, thresholds, and complia...
Income Tax : This guide explains the applicability of TDS under Section 194Q and TCS under Section 206C(1H), including thresholds, rates, and c...
Income Tax : Introduction: The Government of India, through the Ministry of Finance’s Department of Revenue, has provided essential updat...
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...
Income Tax : Rationalisation of With-Holding Tax (WHT) to Encourage Greater Subscription in Indian Debt Securities by Foreign Investors, Encour...
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...
Income Tax : The Finance Act, 2009 introduced new provisions (section 206AA) in the Income-tax Act, 1961 (the Act). As per these provisions any...
Income Tax : The Tribunal held that, apart from the CBDT clarification, the seller had declared the capital gains and discharged taxes. Therefo...
Income Tax : The Tribunal held that no TDS demand can survive where tax was duly deposited and PAN became operative within the CBDT-prescribed ...
Income Tax : The Tribunal examined whether tax was short-deducted on remittances to non-resident shareholders. It held that TDS at 11.54%, deri...
Corporate Law : The Court clarified that rental payments for aircraft engines fall under equipment per the India-Netherlands DTAA, and beneficial ...
Income Tax : The Delhi High Court held that TDS for non-residents without PAN should follow DTAA rates, not the 20% rate under Section 206AA. T...
Income Tax : DGIT(S)/ADG(S)-2/Compliance Check/432/2021-22 Government of India Ministry of Finance Central Board of Direct Taxes Directorate of...
Income Tax : 37BC. Relaxation from deduction of tax at higher rate under section 206AA.– (1) In the case of a non-resident, not being a compa...
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 taxability of the payments in the hands of a non-resident.
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
Issues like the inclusion of section 206 AA by Finance Act 2009 w.e.f 1.4.2010, which includes non obstante clause where payments made to non residents in course of exports need TDS deductions compelling non-residents to acquire PAN numbers for the same need to be re-considered in view of the judgement of Pune Bench of Tribunals in the Serum Institute Case which states that section 206AA does not have an overriding effect and therefore rates as per DTAA is applicable.
Section 206AA has been brought into Act from 1.4.2010. This section talks about furnishing of Permanent Account number (PAN) by any person entitled to receive any sum or income or amount on which tax is deductible under Chapter XVIIB. This provision cast a obligation on any person receiving an income to furnish PAN to deductor, failing on which tax shall be deducted at the higher of following;
One of the decisions rendered by the Bangalore ITAT in the year 2012 relating to Section 206AA, in case of Bosch Ltd. (141 ITD 38) confirming its ability to Override the provisions of the Entire Income Tax Act. However as regards dispute that was there before the Hon. bench was only with regard to Section 139A(8)(d) read with Rule 114C and 206AA.
Bangalore ITAT, A Bench has in the case of IBM India Private Ltd., v ITO (TDS) held that Tax deduction at source / Tax collection at source [TAS] Provisions are attracted even if the provision is made in the books of account to measure the economic performance of the entity irrespective of whether the exact amount and the payee is determined or not.
In this article, author attempts to brief ITAT (Pune) judgement of Serum Institute of India Limited describing the rate of tax deduction on payments made to non-resident recipient who do not have Permanent Account Number (PAN).
The assessee had made payments to non-residents on account of interest, royalties and fees for technical services and the same were subject to withholding under Section 195 of the Act. The assessee in accordance with provisions of Section 90(2) deducted tax on such payments as per the beneficial rates prescribed in the DTAA with respective countries.
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.
Higher TDS under section 206AA not to be applicable in respect of tax deductible under section 194LC Section 194LC, inserted by the Finance Act, 2012, provides for a concessional rate of withholding tax @ 5% on payments to non-residents in a case where an Indian Company borrows money in foreign currency from a source outside […]
