TDS at a higher rate on all transactions not having PAN -PRO

Dear Deepak,

As per new amendment TDS in case Payee has not furnished PAN is to be deducted at

higher of following-

1) @ 20%

2) @ Rate prescribed

The above rule is applicable for Non Residents as well

Dear Sir,

You are correct that NR's are not willing to take PAN. Thatswhy this power has been given to CIT under income tax act that you can get refund by applying to CIT if income is not taxable in india. For this purpose what companies do is:-

Say, you have to pay Rs. 50 to the NR

Now gross up the amount of Rs. 50 with the rate of TDS

50 / 100-TDS Rate i.e. 50/0.80 i.e Rs. 62.5

Now Deduct TDS on this amount 62.5*0.2 i.e. Rs. 12.5

Now pay Rs. 50 to NR and 12.5 as TDS. Now you can apply to the commissioner for the refund of TDS as the income was not taxable in india.

Hi Friends, Is there any circular/ notification issued in this regard?

I think it is only an announcement by the Finance Ministry.

So is it enforceable in view of the law?

Hi Amir,

I have a question,

Our company is having an employees' co-operative society the objective of which is to provide loan to employees and collect interest and also to disburse the interest to the members i.e the employees who have deposits. Beside they pay interest to company also for the fund provided by the company as loan. They did not applied for a PAN or filed IT return before.

Now with the changed senario especially on PAN and more stringent provision as introduced for tds, the company also feel they should apply for PAN deduct tds according to rule. Whether their income will be deductible in section 80P? Whether their activity will be covered for IT perview ? Can anybody please help me out?

regards,