Tds and tax credit

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 August 2012 My query is based on section 206AA and its linkage with availment of tax credit.As per section 206AA every assessee entitled to receive any income on which tds is deductible is required to furnish his PAN to the deductor otherwise tds shall be deducted at higher of following rates,namely:-
i)at the rate specified in relevant provisions of the act;or
ii)at the rates in force;or
iii)@ 20%
Further deptt. prepares and issues an annual consolidated tax statement 26AS as per rule 31AB which contains all details of tds/tcs deducted of the assessee in particular FY. Moreover as far as I know tax payment details can't be posted into such statement unless and until PAN is provided and that too correctly and deptt allows credit to assessee only on basis of this statement.
So if any assessee, say in case of a contractor, fails to furnish his PAN to the deductor & as a result of this his tds gets deducted at rate of 20% instead of 1%.Whether he will be entitled to claim any tax credit of tds so deducted at punitive tax rates and if yes then how much 1% or 20% and on what basis? Will tds so deducted appear in his tax statement 26AS as he did not furnish his PAN? Can deptt allow credit even if such tds details are missing in 26AS?
please explain
thanx in advance

Naresh Kansala

Naresh Kansala (Expert)
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08 August 2012 In this case assessee has to provide the PAN to deductor and then deductor revise his tds return after that the assessee claim tds

CA Urvish Sanghavi

CA Urvish Sanghavi (Expert)
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08 August 2012 Sir,
You can get the credit of what ever amount is deducted and deposited to the govt. account by the deductor, subject to the availability of PAN and furnishing the return of Income.

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