Cess on tds on payment to non residents

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 February 2012 In case foreign company does not furnish PAN, and rate of 20% is to applied for TDS purposes, then whether education cess @ 3% will be applicable in addition to 20% rate of tax or not.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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15 February 2012 Cess is not applicable because there is no reference of section 206AA in the two sub-sections of section 2 of the Finance Act, 2010. Likewise, a reference of section 206AA is missing in the First Schedule to the Finance Act,2010.
Education cess is imposed by sub-sections (11) and (12) of section 2 of the Finance Act, 2010. Even in these sub-sections, one fails to find out a reference of section 206AA. Consequently, the rate of 20 per cent under section 206AA cannot be increased by surcharge and education cess.

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