TaxTMI 
TaxTMI 
As per Section 206AA it is mandatory for Non residents to quote PAN does this cover all ( ie non resident indians, non resident companies and other non residents) If PAN is not quoted by Non resident then tds at higher of rates will have to be applied. If there is a DTAA with the country in which non resident is located and the rate as per DTAA is lower then which provision will prevail will DTAA prevail or rates as per Section 206AA will have to be applied. readers views are solicited
Non disclosure of pan - higher rates - DTAA applicability
27 Jan 2010 
5 Replies 
2461 Views Asked by
PAN requirement for non-residents may trigger higher withholding unless the DTAA rate applies where income is taxable in India.
Non-resident payees must quote a Permanent Account Number and, if PAN is not furnished, payors may deduct tax at a higher withholding rate under Section 206AA. While some respondents contend the lower DTAA rate should prevail, others maintain Section 206AA overrides treaty relief; however, higher withholding is only applicable where the income is chargeable to tax in India, making the domestic taxability analysis of the payment determinative. (AI Summary)
Non-resident payees must quote a Permanent Account Number and, if PAN is not furnished, payors may deduct tax at a higher withholding rate under Section 206AA. While some respondents contend the lower DTAA rate should prevail, others maintain Section 206AA overrides treaty relief; however, higher withholding is only applicable where the income is chargeable to tax in India, making the domestic taxability analysis of the payment determinative. (AI Summary)