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Discussion > Income Tax > TDS >

TDS u/s 192 @20% if NO PAN ??

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Service


[ Scorecard : 63]
Posted On 20 July 2010 at 14:54 Report Abuse

Dear all,

Some of the employee of our company not provided their PAN to salary dept as they do not have any tax liabilty till date.My 1st question is can Salary dept. voulantaryly deduct TDS on salary without any intimation from the employee? 2nd question is should we deduct @ 20% if no PAN?


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Shudhanshu Agrawal
CA Final and CS Final


[ Scorecard : 2438]
Posted On 20 July 2010 at 15:14

According to the provisions TDS need to be deducted. For the reasons i am discussing important Sections and their interpretations.

 

Section 192- TDS on salary need to be deducted as per the provisions of Section 192. As per Section 192 TDS shall be deducted as per the rate applicable in the relevant Finance Act.

Section 206AA - This Section was introduced by Finance Act 2009. As per this section if any person does not provide his/her PAN then TDS need to be deducted @ 20 %.

 

In case of salary, we think that tax is not applicable till Rs. 1,60,000 but it is not so. In the Finance Act we see it properly in the columm of rate NIL is mentioned. It means that it is not exempted but rate of tax is zero.

With this we can conclude that if any employee is not providing his PAN no then TDS shall be deducted due to Section 206AA @ 20%





CA. BIJENDER KR. BANSAL
ACA, B.COM


[ Scorecard : 7827]
Posted On 20 July 2010 at 16:00

But In my opinion and as per the reading of 206AA which states as follows

 

“Notwithstanding anything contained in any other provisions of this act, any person entitled to receive any sum or income or amount, on which tax is deductible under chapter XVIIB (hereafter referred to as deductee) shall furnish his PAN to the person responsible for deducting such tax (hereafter referred to as deductor), failing which tax shall be deducted at the higher rate.”

 

Please note the important wordings in the text of section are “on which tax is deductible”, i.e if the employee getting salary less than Rs. 160000 i.e exemption limit, then they are not getting sum on which tax is to dedutible. hence section 206AA is not apply to them, no tds will be deduct on them.

 

If the person is getting salary more than exemption limit and claiming deduction u/s 80 C for tax saving, then PAN no. should be must.

It he is not providing, then you can apply Section 206AA and TDS 20% will be deduct on it.




Shudhanshu Agrawal
CA Final and CS Final


[ Scorecard : 2438]
Posted On 20 July 2010 at 16:06

Originally posted by : CA. BIJENDER KR. BANSAL

But In my opinion and as per the reading of 206AA which states as follows

 

“Notwithstanding anything contained in any other provisions of this act, any person entitled to receive any sum or income or amount, on which tax is deductible under chapter XVIIB (hereafter referred to as deductee) shall furnish his PAN to the person responsible for deducting such tax (hereafter referred to as deductor), failing which tax shall be deducted at the higher rate.”

 

Please note the important wordings in the text of section are “on which tax is deductible”, i.e if the employee getting salary less than Rs. 160000 i.e exemption limit, then they are not getting sum on which tax is to dedutible. hence section 206AA is not apply to them, no tds will be deduct on them.

 

If the person is getting salary more than exemption limit and claiming deduction u/s 80 C for tax saving, then PAN no. should be must.

It he is not providing, then you can apply Section 206AA and TDS 20% will be deduct on it.

Can you provide me where it is written that upto Rs 1,60,000 income is exempted from tax??



CA. BIJENDER KR. BANSAL
ACA, B.COM


[ Scorecard : 7827]
Posted On 20 July 2010 at 16:37

 

20. In Form 24Q, should the particulars of even those employees be given whose income is below the threshold limit or in whose case, the income after giving deductions for savings etc. is below the threshold limit?

 

 

 

 

Particulars of only those employees are to be reported from the 1st quarter onwards in Form 24Q in whose case the estimated income for the whole year is above the threshold limit.

 

 

In case the estimated income for the whole year of an employee after allowing deduction for various savings like PPF, GPF, NSC etc. comes below the taxable limit, his particulars need not be included in Form 24Q.

 

In case due to some reason estimated annual income of an employee exceeds the exemption limit during the course of the year, tax should be deducted in that quarter and his particulars reported in Form 24Q from that quarter onwards

 

 

http://www.incometaxindia.gov.in/etds_faqs.asp

 

Please click on the above link . It is site of Income tax India. On which it is also used If income of an employee exceeds the exemption limit .

 

I may provide you many site link on which word exemption limit . Nil rate means also exemption .




dhanaji
asst mgr accounts


[ Scorecard : 28]
Posted On 14 January 2012 at 11:11

even in you dont have pan number salary is exempted till the exemption limit of Rs 160000 so that means 20% is applicable after 160000/-




dhanaji
asst mgr accounts


[ Scorecard : 28]
Posted On 14 January 2012 at 11:12

even if you don't have pan number salary is exempted till the exemption limit of Rs. 160000 so that means 20% is applicable after 160000/-




karan jit singh
Consultant


[ Scorecard : 784]
Posted On 14 January 2012 at 13:52

yes you can deduct without giving any intimation @ 20%...n mention provision 206aa.......



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