Section 206AA

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Querist : Anonymous

Querist : Anonymous (Querist)

28 July 2010 Is it necessary to deduct TDS on non residents payments after introduction of section 206AA, as this section carries a non obstante clause, so it will override the provisions of Section 90 (DTAA)?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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28 July 2010 1) Mr. S.Sairam in his article (see home page of caclubindia) observes that 206AA prevais over 90(2).
2) Mr. Venkat Rao Marella in his article (see home page of caclubidia) concludes that 206AA prevails over 90(2).
3) Dr. Vinod.K. Singhania in his article in SIRC Newsletter (July 2010 issue) says 206AA cannot override the provisions of DTAA. If a tax treaty provides a tax rate which is lower than 20 %, tax will be deducted at the lower rate,even if PAN is not furnished by the recipient.

Unless CBDT comes out with a notification/ amendment in law at the earliest, the issue will lead to prolonged litigation.

Querist : Anonymous

Querist : Anonymous (Querist)

28 July 2010 If TDS is not deducted at all till now taking recourse to DTAA provisions, what will be position post 206AA?

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