TDS @ 20 % without PAN as well as in case of Invalid PAN ?

SHARE:

You all may have read this news that from 01.04.2010 ,TDS (tax deducted at source) rate without dedcutee  PAN is

  1. Rate provided in the act (normal TDS rate or
  2.  20 % 

which ever is higher .This clause is applicable to all type of deductee .The Maximum TDS rate is applicable in following case
  1. if pan is not provided by the deductee .[section 206AA(1)]
  2. If pan provided by the the deductee is invalid.[section 206AA(6) read with 206AA(1)]

Compliance in First case is easy but its is very difficult for deductor to comply second clause .Suppose a person has provided a pan number to deductor then its deductor responsibility to verify the correctness of pan of the deductee ,if pan is correct then deduct tax at source as per normal rate provided in income tax act/rules/schedule otherwise deduct tax @ 20 % or rate provided which ever is higher .And if deductor fails to deduct -deposit tax at proper rate then he has to face penalty for late deposit of TDS as well as dis allowance u/s 40a(ia).Both these penalties are very stringent .

Now ,the question is here ,how can deductor can check correctness of the pan ? There is no straight way to verify the pan ,But I have Listed few thing hereunder which may be helpful for deductor .
  1. First Thing the deductor should  do is that demand photocopies of the pan card from regular service providers , agents etc.
  2. If photocopies has not been provided by the deductee and Just pan (number) is provided then verify the structure of pan
    • Pan must be of 10 digits .
    • First five digit and tenth digit must be alphabet(A_Z)
    • Sixth to Ninth digit must be Number (0,1,2,3,4,5,6,7,8,9)
    • Forth digit of Pan represent Assessee status,and if a Partnership firm provides pan with forth digit as P or C then it means the pan is incorrect 
      • C — Company
      • P — Person
      • H — Hindu Undivided Family (HUF)
      • F — Firm
      • A — Association of Persons (AOP)
      • T — AOP (Trust)
      • B — Body of Individuals (BOI)
      • L — Local Authority
      • J — Artificial Juridical Person
      • G — Govt
    • Fifth Digit of Pan represent Surname as per Data filled in the application in case of Individual assessees and in other case first name .
  3. Third Thing you can do, check your old etds return filed .You can check status of your old ETDS return from the link provided by filing provision receipt number (prn) and your TAN number .Read how this process works.
  4. In the end I have started a Bulk PAN verification for firms/companies also.This service is free for verification for five pan number.To get free facility person must be subscriber of free email news letter From Simple Tax India. Serious efforts are being used to check the pan ,pan cheeking process is manual process and it needs man power so Please do not send queries for test purpose like sending your own pan for verification .use service only if it is required
  5. For PAN verification for Bulk customers the charges /rate list is given below.
    1. For verification of pan in yes/ no format .
      1. Upto 1000 PAN : Rs 5 per pan minimum Rs 150/-
      2. More than 1000 pan : Rs 5000 or 3 rs per pan which ever is higher. 
    2. Verification showing name of the pan holder 
      1. up to 1000 PAN : Rs 10 per PAN Minimum Rs 200/-
      2. more than 1000 PAN: RS 10000 or 6 Rs per pan which ever is higher.
For Bulk PAN verification contact me at Guptarajin2002@yahoo.co.in or fill following form.


Other Thing you should Know about this new provision.

  1. These provisions are applicable from 01.04.2010 means where tax deductible as per rule is due on or after 01.04.2010.so where TDS is deductible before 01.04.2010 but deducted after 01.04.2010 then this section is not applicable.
  2. The relevant section is 206AA.
  3. This section is applicable on where form 15G is to be submitted for non deduction of the tds where income is less than exemption limit .If payee has not provided the pan on 15G then tax should be deducted @ 20 % as per this clause
  4. Senior citizens could just file Form 15H in absence of tax liability and become eligible for exemption from TDS. If they do not furnish a PAN they will have to face a TDS rate of 20%.
  5. if you want to apply for less tax deduction rate then you have to provide pan otherwise 20 % rate is applicable.
  6. Interest payments to non-residents attract withholding tax at a rate lower than 20% under certain tax treaties.But if Non resident fails to provide pan then 20 % tax rate is applicable.
  7. Payments by residents to non-residents in the nature of royalties or fees for technical services attract withholding tax at rate of 10.56% under the Income Tax Act or at 10% under certain tax treaties in the absence of a permanent establishment or a fixed place of work in India.But if Non resident fails to provide pan then 20 % tax rate is applicable.
  8. 20 % rate is Basic rate and cess and surcharge is addition to this rate in case of Non resident .
  9. Any failure to deduct taxes at appropriate rates will result in disallowance of expenditure for the one making payment, recovery of tax from him, and levy of interest and penalty.
  10.  Interestingly, the total number of PAN issued in the country is in excess of 8 crore. Income Tax department issues the permanent account number in partnership with UTITSL and NSDL.But the tax base of the country is a mere 3.3 crore because of massive underreporting of incomes and large-scale exemptions.Quoting of PAN will allow income tax authorities to establish an audit trail and catch tax evaders.
  11. These clauses are not applicable on TCS( tax collected at source)
  12. It is clarified that Higher TDS doesn't means higher income tax .Means its a Just increased rate of with holding of amount and even in these type of cases assessee can file his return and can claim refund from income tax department .But to claim the refund PAN is required ,so it is advisable to all my friend ,who may fall under this provisions to apply for pan and avoid TDS as you know that there may be some difficulties and problem to get refund from Income tax Department .
complete new section has been reproduced hereunder

206AA. Requirement to furnish Permanent Account Number.—(1) Notwithstanding anything contained in any other provisions of this Act, any person entitled to receive any sum or income or amount, on which tax is deductible under Chapter XVIIB (hereafter referred to as deductee) shall furnish his Permanent Account Number to the person responsible for deducting such tax (hereafter referred to as deductor), failing which tax shall be deducted at the higher of the following rates, namely:—
   (i)  at the rate specified in the relevant provision of this Act; or
  (ii)  at the rate or rates in force; or
(iii)  at the rate of twenty per cent.
(2) No declaration under sub-section (1) or sub-section (1A) or sub-section (1C) of section 197A shall be valid unless the person furnishes his Permanent Account Number in such declaration.
(3) In case any declaration becomes invalid under sub-section (2), the deductor shall deduct the tax at source in accordance with the provisions of sub-section (1).
(4) No certificate under section 197 shall be granted unless the application made under that section contains the Permanent Account Number of the applicant.
(5) The deductee shall furnish his Permanent Account Number to the deductor and both shall indicate the same in all the correspondence, bills, vouchers and other documents which are sent to each other.
(6) Where the Permanent Account Number provided to the deductor is invalid or does not belong to the deductee, it shall be deemed that the deductee has not furnished his Permanent Account Number to the deductor and the provisions of sub-section (1) shall apply accordingly.”.

COMMENTS

BLOGGER: 3
Loading...

$show=index

Name

. SECURITIES (MNP) (TDS)2007-08 ` 01.07.12 01.09.2008 01.10.2012 06.07.2009 07.08.2012 1 PERCENT EXCISE ITEMS LIST 1 sep 1% excise 10 year nsc 10(10C) 1000 court cases judgements supplied to ITO 1000 rupee note 11-2008 11-2010 130 items 14.08.2008 15 august 150 Rs coin 15g 15h 18-12-2009 192(1A) 192A 194 I 194A 194c from 01.10.2009 194H 194j 194LC 1981-2007 2% cst 2% excise 2004 2008 2008-09 FY 2010 206AA 234A 234B 234C 234c interest calculator 234E 23AC 23ACA 23B 24C 24q annexure II 25 paisa coin 271(1)(c) 271B 271H 272B 27A 280 280 challan 281 282 283 29 AUGUST 29.04.2010. 29/08/2008 29/2008 service tax 2g meaning use 3 idiots 30 MARCH 31st March 32-2010 33 of 2009 35(2AA) 35(2AB) 3CD 3g meaning use 40(b) 43B 44 AB EXEMPTED INCOME 44AA 44AB AGRICULTURE 44AB new limit 44AB NON RESIDENT 44ad 46/2012 45/2012 49C 5 day week 5 years post office deposit 5/2011 50 paisa coin 54b 54EC 54ee 54f 54gb 5th paycommission punjab 6 % excise 6 crore advance limit 6/2005 69/2010 6th cpc 6TH PAY COMMISSION 70% of pan etds 7th Central Pay Commission 8 tips to save tax 80C 80ccc 80CCD 80cce 80CCF 80CCG 80d 80DDB 80EE 80G 80GG 80GGA 80GGB 80ggc 80tta 80U 85% of pan etds 86/2008 DATED 13-08-2008 87A rebate 89(1) 89(1) relief calculator 9.5 % rate for private epf 92E 95% of pan etds 98 dated 04/01/08 aadhaar aakash tablet aam admi aar Aayakar Sampark Kendra abatement abolished ACCOUNT PAYEE DRAFT Accounting ACCOUNTING CODE accounting code for services ACCOUNTING FOR GOVT GRANTS accounting standards ACES ADD IN Add-Ins additional relief in budget 2010 adjustment of advance FBT with advance Tax advance rullings advance salary ADVANCE TAX CALCULATOR advance tax challan ADVANCE TAX CUT OFF AMOUNT ADVANCE TAX DATES AFFIDAVIT AG Projects Technologies Ltd RT age 80 addition pension aibea wage revision aibea wage revision latest news aiboa aiboc aiboc wage revision AIG AIR airline ticket booking tds airlines all is well allowances allownces alphabet of inspiration alteration on check allowed alternate minimum tax AMENDED 3CD amendment in companies bill 2011 amendment in gratuity act 2010 amendment in registration service tax AMENDMENT IN SERVICE TAX ON RENT amendment to finance Bill 2010 AMNESTY SCHEME 2007 amt Anna Hazare anna hazzare bill vs govt lokpal bill appeal apply for new pan card against old pan card aqb arbitration arrears of salary arrears of sixth pay ARRERS TAX AS-12 ASBA assessee in default ASSESSMENT REOPENING ASSESSMENT YEAR 2008-09 REFUND atm atm 100 per day atm cash without card atm tips atm wrong debit audit cases itr filing audit limit enhanced Audit Questionaire AUDIT REPORT AUS VS IND.INDIA VS SL Automated teller machine AUTOMATION OF CENTRAL EXCISE AND SERVICE TAX ay 2010-11 bad debts Bank Bank account bank audit bank audit 2012 bank charges BANK SALARY bank strike 06/07/09 and 07/07/09 banking law amendment banknotes banks npa provisioning BARE ACT bare rules BASE RATE BY BANKS bcct BIMAL JAIN biometric pan card black and white form not acceptable black money BLOCK PERIOD blogging bobay refund BONUS bonus share book discount BOOK ON EFILING BOOK REVIEW books of accounts BOOMING INDIAN ECONOMY both House rent allowance both hra and house loan Brass Scrap BRIBE CASE BROKER BSE bsnl broadband bsnl broadband usage bsnl land line sms alert BSR CODES BUDGET 2009 budget 2010 budget 2010-11 budget 2011 BUDGET 2012 budget 2013 BUDGET 2014 BUDGET 2014 CONTEST budget expectations BUDGET HIGHLIGHTS budget live on computer budget live telecast budget notification budget on tv budget speech BUDGET SPEECH DOWNLOAD Budget-2014 Budget-2015 BUDGET-2016 BUDGET08 Business BUSINESS AND PROFESSION MEANING BUSINESS COVERED UNDER 44ab BUY HOUSE C FORM CA CAN ONLY AUDIT MVAT CA CLUB INDIA CA GIRISH AHUJA CA NITIN GUPTA CA PARDEEP JAIN CA ROHIT GUPTA ca services CA sudhir Halakhandi CA Swapnil Munot CA Vikas Khandelwal calculate arrear CALCULATE NEW PAY calculate your emi calculation of tax on salary arrears CALCULATOR CALCULATOR REVISED capital asset capital formation huf Capital gain capital gain account scheme 1988 CAPITAL GAIN INDEX capital gain on repayment of loan capital gain on tenancy rights capital goods capital revenue CAPITAL SUBSIDY CAR LOAN RATE INCREASE carry forward of losses in late return cas cash flow statement CASH PAYMENT DIS ALLOWANCE CASH PAYMENTS EXCEEDING 20000 CASH SUBSIDY cbdt cbec CBI ARRESTED centeral sales tax rate CENTRAL PAY COMMISSION CENTRAL PROCESSING CENTER CENTRALISED PROCESSING OF RETURNS Cenvat CENVAT Credit Rules cgas 1988 challan challan 281 CHALLAN 289 challan correction challan Form 17 CHALLAN STATUS INQUIRY change change in cst rate change in excise duty rates CHANGE IN PAN ADDRESS CHANGE IN PAN DATA change in tds rates in budget changes CHANGES IN SERVICE TAX ACT changes in new itr forms CHANGES IN TDS CHARGES ON CASH PAYMENT OF CREDIT CARD BILL charitable organisation check name from PAN check tds deducted online Cheque cheque bounce cheque payment before due date cheque tender date /realisation date Cheque Truncation CHEQUE VALIDITY child care leave CHILD DEPENDENT PREMIUM CHILD MARRIED PREMIUM child plan childeren name children education allownces chip based atm card cibil cibil for companies CII 2007-08 CII 2008-09 CII 2010 cii 2012-13 CII2011-12 cin CIRCULAR 3/2010 DT 2.03.2010 CIRCULAR 8-2010 CIT v. Emilio Ruiz Berdejo (2010) 320 ITR 190 (Bom.) cloning of atm card clubbing of income COLLECTION CHARGES COLOR SCHEME COMMISSION ON SMALL SAVINGS common error in 2009-10 common error in itr 4-5-6 compa companies bill 2012 COMPANIES RATE COMPANY BILL 2011 company deposit Company Law Settlement Scheme COMPANY REGISTRATION complusory payment of taxes Composition scheme service tax COMPUTER AS FAX MACHINE computer sytem at ito office CONCEPT PAPER configure yahoo mail in outlook express consolidate account statement construction purchase of house Consultancy Service Consumer Price Index continues services CONTRIBUTION TO NEW PENSION SCHEME CONTRIBUTORY PENSION FUND CONVERT FIGURES INTO WORD EXCEL COPARCENER CorpMcash corporation bank correction etds CORRECTION IN PAN DATA correction in section CORRECTION RETURN CORRECTION RETURN.ETDS cost accounting cost audit cost inflation index cost inflation index 2012-13 COST INFLATION INDEX FY 2010-11 COST INFLATION INDEX FY 2011-12 COST OF INDEXATION CALCULATOR court case in entry tax punjab cpc phone number cpf Credit card CREDIT CARD BILL PAYMENT ICICI BANK credit scores cricket team critical illness CROSSED DEMAND DRAFT CRR crr reducred CS DIVESH GOYAL CST CST 3% OR 2 % cst act 1956 cst form CST FORM STATUS cst rate changed CST REDUCE RATE ctt currency CURRENCY TRADING ILLEGAL custom custom changes in budget cusual leave DA MERGE da rate da rate 01.07.2012 da rate january 2013 da rate july 2012 da rate wef 01.01.2012 date extension DDO ASK RENT RECIPT ddt dearness allowance Debit card DEBT EQUITY RATIO debt funds debt trap declared goods DEDUCTION 80C deduction for higher studies deduction on saving bank interst deduction u/s 80DD Deemed income of employee deemed services defective return defence officers defence pay defence pay scales DELAY IN FILING delete ledger in tally DELHI HIGH COURT demat deposit tax of two quarter in single challan depreciation depreciation on car depreciation on commercial vehicle. DEPRECIATION ON INTANGIBLE ASSETS depreciation rate depreciation rate 2009-10 DETAIL AFTER E FILLING DETAIL OF TIN Determination of value DIFFRENT TYPE OF TAXES digital signature din direct payment in bank account DIRECT SUBSIDY direct tax bill direct tax changes in budget direct tax code direct tax code 2009 Disability insurance discussion Paper distribution of salary dividend distribution tax dividend striping dnd do not call. document identification number document ientification number documents required for service tax registration domestic transfer pricing donation dot double taxation dow jones download download 89(1) relief calculator download direct tax code 2012 download form 16A download fvu download idfc INFRA BONDS FORM draft reply drawback rates dtaa dtc DUE DATE AY 2010-11 due date ay 2011-12 due date extended due date extended to 31.08.2012. due date for service tax return due date form 16 due date form 16a due date June due date march tax due date of return 2008-09 due date pf esi due date to deposit tds DUE DATES DUE DATES CALENDAR DUE DATES CALENDER DUE DATES INCOME TAX DUE DATES SERVICE TAX DUE FAMILY PENSION DULICATE PAN DUPLICATE TAN dvat e book Income Tax rules e book on service tax E ERA OF TAXES e filing do and don'ts e filing of audit report e filing processing status e filing software excel free e filing through evc e filing utilities e mode for notice to shareholder e notice to share holder e payment of epf E PAYMENT OF EXCISE DUTY e payment of income tax E PAYMENT OF SERVICE TAX e payment of tds E STAMP DUTY e tutorial for TAN registration E-1 FORM E-1 SALE e-commerce E-FILE SERVICE TAX RETURN e-Intermediary e-payment from friends account E-PAYMENT OF SERVICE TAX e-payment of taxes E-SE