Your option A is correct

Dear All,

20% Provision apply for payment other than salay (in case of non availability of PAN).

If pan is not then @ 20%.

@ Sandeep: Please refer section 206AA, it overrides entire Income Tax Act.

If PAN is not furnished by the employee, the deductor will calculate the average rate of income-tax based on rates in force as provided in sec 192. If the tax so calculated is below 20%, deduction of tax will be made at the rate of 20% and in case the average rate exceeds 20%, tax is to deducted at the average rate. Education cess @ 2% and Secondary and Higher Education Cess @ 1 % is not to be deducted, in case the TDS is deducted at 20% u/s 206 A A of the Income-tax Act.

Ref :Circular 8/2010 dated 13.12.2010

Originally posted by : Milan Somani
	If PAN is not furnished by the employee, the deductor will calculate the average rate of income-tax based on rates in force as provided in sec 192. If the tax so calculated is below 20%, deduction of tax will be made at the rate of 20% and in case the average rate exceeds 20%, tax is to deducted at the average rate. Education cess @ 2% and Secondary and Higher Education Cess @ 1 % is not to be deducted, in case the TDS is deducted at 20% u/s 206 A A of the Income-tax Act. Ref :Circular 8/2010 dated 13.12.2010

Exactly it has to be higher of 20% or tax applicable as per the TDS Section or the rates that are brought in to force by the finance act.

If you point a Gun like one on your Profile pick then ofcourse you can solve any problem. Thanks for clarifying in detail with specific circular. Every1 pls conclude this topic here. Thanks to all.

Originally posted by : Ravi Thapa
	If you point a Gun like one on your Profile pick then ofcourse you can solve any problem. Thanks for clarifying in detail with specific circular. Every1 pls conclude this topic here. Thanks to all.

hahaha

Please Read Sec 206AA of Income Tax Act 1961

If you point a Gun like one on your Profile pick then ofcourse you can solve any problem. Thanks for clarifying in detail with specific circular. Every1 pls conclude this topic here. Thanks to all.

nice written..Ravi ji

Hello Ajay,

A Option is right But if Employee salary is 135000/ p.m then 20% is not right according to me ..!! if he doesn't quote the pan. B'coz he also come is 30% slab rate. then 20% tds deduction is not right. he is also pay more tax compare to 20% flat rate. 

Dear Ajay,

1. If after deduction, Employee is below threshold limit than tax would be zero% (In both cases PAN Number available or not).

2. If Taxaable He falls is 10%, In case no PAN number availabale, Apply 20% governed by section 206AA.

3. If Taxable Slab is 20%, Same would apply. (Section 192 or 206AA both at 20%).

4. If Taxable Slab is 30%, Apply 30% (Even He does not hold PAN).

At Last- First make it for employees to hold PAN to meet requirement of etds Return for Salary, Second for more clarity read this year circular on TDS u/s 192, Circular No. 05/2011 dated 16.08.2011, as quoted in earlier replies also, there are some clarities here like in case of Salary from more than one  employer etc.

-SsB