TDS on Foreign payment under DTAA if no PAN

[deepak gulati]

In case of Payments out of India, the Payee not having PAN. what will be the rate of TDS, 20.60% ( u/s 206 ) or DTAA rates.

AI Summary

Debate on TDS Rate for Foreign Payments Without PAN: Section 206AA vs. DTAA Benefits A discussion on a tax forum addresses the rate of Tax Deducted at Source (TDS) on foreign payments when the payee does not have a Permanent Account Number (PAN). One participant asserts that under Section 206AA of the Income Tax Act, a 20% TDS rate applies, overriding other provisions. Another participant argues that Double Taxation Avoidance Agreements (DTAA) take precedence, suggesting the most beneficial rate to the assessee should apply. A query about the applicability of TDS on a $17,000 foreign payment is raised, with clarification sought on the exact transaction details.