Pan not avbl sec.206aa

This query is : Resolved

Avinash (Querist)
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19 April 2012 Greetign to All,
As per sec. 206AA, If an employee has not furnished the PAN, tax will be deducted at higher of 20% or average rate. So, in this case, pls. let me know the tax to be deducted in FY.11-12, if;

1. Employee's total income is Rs.2Lac. Should we calculate tax @20% on 20,000/- (200000-180000) or on 2,00,000/-
2. Employee's toal income is Rs.900000/-

So, if employee has not furnished the PAN, is he eligible for basic exemption limit of RS.1.80Lac.

Regards,
Avinash.

Yogesh Agarwal

Yogesh Agarwal (Expert)
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19 April 2012 Yes benefit of basic exemption is available with him since section 206AA speaks about the rates of TDS in case of failure to furnish the PAN not the amount on which TDS is to be deducted..

Also it is not clear that the employees had reported to the employees about his income of Rs. 900000/-

IF he has reported the same then check the higher rate for compliance of section 206AA.