PAN not available... what to do...?

This query is : Resolved

darpan chheda (Querist)
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19 August 2010 We have made payment towards building rent on which we have deducted TDS @ normal rates. However since the owner of the building is an NRI, he does'nt have a PAN no. Now the question is whether we should invoke penal provisions & start deducting TDS @ 20%...? we have already made 2 months' rent applying the normal TDS rates... What should be done for this...? Please reply...

It is very very urgent sir...

Thanks in advance for the cooperation

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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19 August 2010 You should ask him to apply for PAN. It will resolve your problem otherwise you will have to deduct TDS @ 20% 01.04.2010 onwards.

Murtaza I Bhagat

Murtaza I Bhagat (Expert)
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19 August 2010 yes, in case of non allotment of pan to deductor then strick 20% TDS should be followed by rules..
its better to apply its simple for PAN No. its take 5 to 10 days for PAN..
Apply in 49A in any TIN facilities Center in your area of NSDL or UTI.

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darpan chheda

darpan chheda (Querist)
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20 August 2010 Thanks a lot sir for your prompt reply. One more clarity. If the party does'nt cooperate & we have to deduct TDS @ 20% with retrospective effect from 1.4.2010. WIll we be liable to pay any penal interest on this. If yes, what will be the rate & under which section...?

Solicit your opinion on this sir...

Thanks a lot for all the guidance

Keep up the great work...

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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20 August 2010 Yes you will have to deposit the amount of short deduction along with penal interest @1% p.m. and you will also have to revise you TDS return for the said quarter.

Murtaza I Bhagat

Murtaza I Bhagat (Expert)
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20 August 2010 deposit shortfall with int. @ 1%

darpan chheda

darpan chheda (Querist)
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20 August 2010 Thanks a lot sir...

All my queries are resolved...

Thanks