Rate for DTA

[KRISHNAMURTHY S P]

Newly inserted Section 206AA requires every payee of sum which attract TDS, furnish PAN. Is it applicable to Non Resident Payee also. Suppose DTA rates is less than 20%, whether DTA rate Prevails or 20%?

AI Summary

Section 206AA: PAN Requirement for Non-Residents Confirmed, Affects TDS Rates for Interest, Royalty, Services. A query was raised regarding the applicability of Section 206AA of the Income Tax Act, which mandates that payees provide a PAN for TDS purposes, and whether it applies to non-resident payees. The discussion highlighted that Section 206AA is an overriding provision, applicable when a PAN is not furnished, potentially increasing TDS rates to 20%. It was clarified that the DTAA rates or the 20% rate, whichever is lower, would apply. Additionally, it was confirmed that Section 206AA applies to non-resident payees, with specific tax rates for interest, royalty, and technical services.