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.

[Reshma kochar]

Tax will be deducted as per Section 206AA,  as this section has an overriding effect on any other provisions of Income Tax Act, 1961.

Regards,

Reshma

[deepak gulati]

As per provision of Section 206AA the rate of TDS is @20%

[Reshma kochar]

Rate will be only 20% as no cess and surcharge will imposed u/s 206AA

 

Regards,

Reshma 

[Ramamohan achar]

But in my opinion the rates precribed in the DTAA cannot be overriden by other sections of the Income TAx act, since DTA overrides any provisions of the Income Tax Act and the rates to be applied is whichever is beneficial to the assessee. The DTA is an agreement signed with the other country and thus it will override the other sections.

Regards,

B.Prasanna

[Annappa Naik]

Hi,

I would request you to guys, could pls help me, we have received $17000 bill from data base compan, My request is is TDS will applicable On forign payment? if Yes with out PAN what is the percentage, with PAN number what is the percentage..

Annappa

[Reshma kochar]

your question is not clear... what is the exact transaction for $17000.

 

Regards,

Reshma

AI Summary

TDS on foreign payments: absence of PAN triggers higher domestic withholding; treaty rates may nevertheless prevail.
Issue: withholding on outward payments to a foreign payee without PAN. One position treats Section 206AA as triggering a higher domestic withholding rate where PAN is absent, with no cess or surcharge applied under that provision. A contrasting position holds that the DTAA governs the applicable withholding rate and that treaty rates beneficial to the payee should prevail over conflicting domestic provisions.