Tds deduction

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 October 2011 Our Company had paid an amount of Rs.8.5 lakhs to a foreign Co. of China for Technical consultancy Services and the TDs was beared by us at the rate 10%.But according to sec. 206(AA)the person not having Pan No. is liable to TDS deduction @20%. so i wanted to know that is Sec206AA apllicable in case of Foreign Co. also because according to treaty with China we are liable to deduct only @ 10% for any payments made.
Please help me out regarding this matter

CA Chitresh Gupta

CA Chitresh Gupta (Expert)
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08 October 2011 Yes, Section 206AA is applicable in case of Foreign Companies Also.

Section 206AA overrides all other provisions of Income Tax Act. Hence, section 90 which entitles for the beneficial provision as per domestic law and DTAA is not attracted.

Therefore, you need to ask the foreign company to get the PAN number in India else the TDS will be @ 20%

Regards

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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16 October 2011 You will face issues as TDS Return forms automatically change the rate of TDS if PAN is not filled up.

Technically you can fight the case as Treaties override Domestic Law, but that all shall be difficult task.

Anuj
+91-9810106211
femaquery@gmail.com

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