Higher Rate of Tax Deduction at Source for non-PAN holders
No.402/92/2006-MC (04 of 2010)
Government of India / Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
***
New Delhi dated 20th January 2010
PRESS RELEASE
Government of India / Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
***
New Delhi dated 20th January 2010
PRESS RELEASE
A new provision relating to tax deduction at source (TDS) under the Income Tax Act
1961 will become applicable with effect from 1st April 2010. Tax at higher of the prescribed
rate or 20% will be deducted on all transactions liable to TDS, where the Permanent Account
Number (PAN) of the deductee is not available. The law will also apply to all non-residents
in respect of payments / remittances liable to TDS. As per the new provisions, certificate for
deduction at lower rate or no deduction shall not be given by the assessing officer under
section 197, or declaration by deductee under section 197A for non-deduction of TDS on
payments shall not be valid, unless the application bears PAN of the applicant / deductee.
2. All deductors are liable to deduct tax at the higher rate in all transactions not having
PAN of the deductees on or after 1st April 2010. In order that there is no dispute regarding
quoting / non-quoting of PAN or accuracy thereof, the law requires all deductees and
dedutors to quote PAN of deductees in all correspondences, bills, vouchers and other
documents sent to each other. All deductors are, therefore, advised to intimate their
deductees to obtain and furnish their PAN so as to avoid TDS at a higher rate. All deductees,
including non-residents having transactions in India liable to TDS, are advised to obtain PAN
by 31st March 2010 and communicate the same to their deductors before tax is actually
deducted on transactions after that date.
3. The procedure for obtaining PAN is simple, inexpensive and quick. Application for
PAN can be filed in Form 49A to National Securities Depository Ltd. (NSDL) or Unit Trust
of India Investor Services Ltd. (UTIISL) or their intermediaries. Non-residents can apply
through the local embassy / consulate of India. Applications can also be filed, paid for or
tracked online through the Internet on the following web-sites:-
http://incometaxindia.gov.in/
https://incometaxindiaefiling.gov.in/portal/index.jsp
http://www.tin-nsdl.com/
http://www.utitsl.co.in/
4. The Central Board of Direct Taxes (CBDT) has issued Notification No.94/2009
relating to taxation of perquisites / profits in lieu of salary and Circular No.1/2010 for the
guidance of tax dedutors for salaries. These documents are available on the department’s web
site at http://incometaxindia.gov.in/
XXX
1961 will become applicable with effect from 1st April 2010. Tax at higher of the prescribed
rate or 20% will be deducted on all transactions liable to TDS, where the Permanent Account
Number (PAN) of the deductee is not available. The law will also apply to all non-residents
in respect of payments / remittances liable to TDS. As per the new provisions, certificate for
deduction at lower rate or no deduction shall not be given by the assessing officer under
section 197, or declaration by deductee under section 197A for non-deduction of TDS on
payments shall not be valid, unless the application bears PAN of the applicant / deductee.
2. All deductors are liable to deduct tax at the higher rate in all transactions not having
PAN of the deductees on or after 1st April 2010. In order that there is no dispute regarding
quoting / non-quoting of PAN or accuracy thereof, the law requires all deductees and
dedutors to quote PAN of deductees in all correspondences, bills, vouchers and other
documents sent to each other. All deductors are, therefore, advised to intimate their
deductees to obtain and furnish their PAN so as to avoid TDS at a higher rate. All deductees,
including non-residents having transactions in India liable to TDS, are advised to obtain PAN
by 31st March 2010 and communicate the same to their deductors before tax is actually
deducted on transactions after that date.
3. The procedure for obtaining PAN is simple, inexpensive and quick. Application for
PAN can be filed in Form 49A to National Securities Depository Ltd. (NSDL) or Unit Trust
of India Investor Services Ltd. (UTIISL) or their intermediaries. Non-residents can apply
through the local embassy / consulate of India. Applications can also be filed, paid for or
tracked online through the Internet on the following web-sites:-
http://incometaxindia.gov.in/
https://incometaxindiaefiling.gov.in/portal/index.jsp
http://www.tin-nsdl.com/
http://www.utitsl.co.in/
4. The Central Board of Direct Taxes (CBDT) has issued Notification No.94/2009
relating to taxation of perquisites / profits in lieu of salary and Circular No.1/2010 for the
guidance of tax dedutors for salaries. These documents are available on the department’s web
site at http://incometaxindia.gov.in/
XXX
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