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20% TDS is Applicable for NRI for non furnishing of PAN

This query is : Resolved 
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(Querist)
08 March 2011
An Indian company has placed an advertisement in foreign company magazine.
For this purpose the Indian company has to pay the amount.

The foreign company does not having any permanent establishment in India & even does not having PAN Card .
As it confirmed the same & confirmed that it is their Business Income as per Article 7 of DTAA.

So whether we have deduct the Tax 20 % on the basis of Sec 206AA or No tax as it is on the basis No permanent establishment.

Please confirm the same.

Sudeep
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Rasesh

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Rasesh (Expert)
08 March 2011 Tax is either to be deducted at 20% or if the party wants full payment, then gross up the invoice.
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CA. Anuj Gupta

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CA. Anuj Gupta (Expert)
13 March 2011 Tax shall not be deductible if the foreign company doesn't have a PE in India.

Anuj
9810106211
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