EXACT TDS RATE FOR NRI FOR WHOM DTAA BENEFIT IS AVAILAED & PAN IS NOT AVAILABLE

[mohan c r]

Dear Sir,

can somebody can guide the following:

An NRI is covered by DTAA agreement. He is not having a PAN.

Interest earned u/s 195 of IT Act.

What is the TDS to be effected. whether 20% or as per DTAA rates or 30.90%(normal rate as per Section 195 as there is no clarifty, can some body guide on the issue.

Thanks

Mohan

[CA Rachit Agarwal]

20% or DTAA whichever is higher.

For availing benefit of lower TDS i.e less than 20%, he must have PAN.

[CASeetharaman KC]

The DTA rate would supersede the higher rate that is if the DTA rate is lower the same would be applicable. In any case PAN no would be mandatory

AI Summary

TDS rate for NRI: treaty rate applies if lower, but PAN required to claim reduced withholding. Practitioner responses address withholding on interest to an NRI covered by a DTAA but lacking a PAN: one view advises withholding at the higher of statutory and treaty rates and requires a PAN to obtain reduced withholding; another advises that a lower DTAA rate would apply but likewise treats presentation of a PAN as mandatory to claim treaty relief.