Shyam Lal Naik (Service) 16 June 2010
The income from salary does not exceed the exemption limit. The employee does no have PAN. Should TDS be deducted @ 20% u/s 206AA.
In response to a query, eminent author Dr. V. K. Singhania has opined that, in such a case TDS has to be deducted @ 20%, In case PAN is furnished, the rate will be 0%. Ref -  18 CPT 117
If the law is constructed in the above manner, it shall be a undue hardship to employers and employees in the unorganised sectors.
Whether contrary construction possible ?
V Sumanth (CA Final student) 16 June 2010
The deduction of TDS arises when the salary exceeds the maximum exemption limit . But in cases where PAN is required to be quoted but not quoted, TDS is maximum of 20% or the TDS rate which ever is higher as per the recent amendment. So what Dr. V. K. Singhania said is correct.
But per IT Act, The employer should also consider the information given by the employee while deducting tax at source regarding his other incomes and deductions.