TDS U/S 206 AA

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R. Narasimhan

Oracle Financial Functional Consultant

30 Points Posted on 18 March 2011

Dear All

Section 206 AA of Income Tax Act specifies deducation of Tax at 20% on income where payee did not provide PAN Number. In this regard, I would request clarifications on following points:

Section 194 C, 194 H, 194 I, 194 J etc., specifies limits beyond which tax needs to be deducted. For example Sec 194 C specifies TDS needs to be deducted if any single payment exceeds Rs.30000 or in a year cumulative payment exceeds Rs.75000. Hence, while deducting TDS under Sec 206 AA, whether this limits must be considered, if the payee did not provide PAN Number or TDS at the 20% has to be deducted from the first payment irrespective of the volume of payment?

Thanks in advance for your clarification.

S.R. Narasimhan

Replies (4)

Athmaram

Articled Assistant

184 Points Posted on 19 March 2011

This is to clarify that if the amount paid to the deductee exceeds the limit then the deductor has to deduct TDS from the first payment made to the deductee.

Hence Sec 206 AA ie, TDS @ 20% if the deductee fails to provide the PAN Number is applicable only if TDS is liable to be deducted.

Thanks & Regards

Ram.

PRAVESH RATHI

CHARTERED ACCOUNTANT

54 Points Posted on 19 March 2011

TDS @ 20% has to be deducted only when the payment exceeds the limit as specified for the different categories and the the payee does not provide his pan no. then Sec 206AA is applicable and TDS @ 20% has to be deducted

R. Narasimhan

Oracle Financial Functional Consultant

30 Points Posted on 20 March 2011

Dear All

Sec 206 AA seems to be a penal provision and if the person could not furnish PAN Number, he / they could not be classified under any category of the TDS provisions. Also the object of the section is to widen the income tax assessee.

Hence, kindly look into those aspects also. Also if the limits of the different sections to be considering for deductions, then the question arises on the requirement of new secton. If the limits to be considered, these provisions could have been made in the respective section itself, instead of introducing a new section.

Thanks & Best Regards

S.R. Narasimhan

HARISH S P

PRACTICE

28 Points Posted on 18 July 2015

Dear Sir,

I'm NRI on IT filing period, due to non submission of PAN for the FD a/c, For the FD interest Rs.100000/-the bank has deducted @ 20% Rs.20000 as tax. Now my question is whether I have report my income or not , if yes means to what extent interest income should be shown. Wether to show interest 1,00,000 and again to pay tax or shall I report interest income as 100000-20000=80000 (which I received)

Regards

Harish