TaxTMI 
TaxTMI 
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.
TDS on Foreign payment under DTAA if no PAN
23 Jan 2012 
6 Replies 
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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. (AI Summary)
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. (AI Summary)