TDS U/s 195 - Foreigners

This query is : Resolved

CA Jithesh C (Querist)
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27 April 2010 Dear Experts,
Kindly let me know whether the benefit as per DTAA is still available to the foreigners or those transactions are also attract TDS at 20% because of absence of PAN.

Thanks

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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27 April 2010 DTAA IS AVAILABLE.

TDS TO VE DEDUCTED U/S195 @ 30.9% OR RATE AS PER DTAA WHICHEVER IS LOWER.

CA Simant Kumar Doshi

CA Simant Kumar Doshi (Expert)
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27 April 2010 sec 206 is overriding section that also override DTAA sec. with this interpretation if DTAA is available and PAN is not furnished than TDS will be deducted @ 20% only and not on MMR rate (30.90%).

taxindiaconnect

taxindiaconnect (Expert)
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05 May 2010 Agreed with Simant. The Provisions of section 206AA which has brought this change in the IT Act relating to PAN starts with a non obstente clause as following -

Nothwithstanding anything contained in any other provision of this Act ………..,

This mean the provision of section 206AA override all the provisions of the income tax Act 1961 including section 90 which provides that in case of a non resident the tax rates as per DTAA or IT Act which are more beneficial shall apply is also overridden. This in your query tax rate @ 20% shall apply.

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