206AA
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
28 July 2010
If TDS is not deducted at all till now on NRI payments taking recourse to DTAA provisions, what will be position post 206AA?
CA. Pradeep Nayak
(Expert)
28 July 2010
In my view, DTAA shall have the overriding effect over Sec 206AA. As such, if DTAA provides for a lower or NIL rate for with holding tax, Sec 206AA cannot require the payer to deduct tax at 20% only because the payee doesnot have a PAN.
This matter will be an issue of constant debate & litigation unless CBDT issues some Circular or Notification to clarify the matter. However, it appears CBDT too doesnot have any valid ground to justify applicability of Sec 206AA to residents of countries having DTAA with India. To justify Sec 206AA, all existing DTAA's need to be re-written.
Please Note : Whatever expressed above, is my personal view. Other Experts can have different views.
This matter will be an issue of constant debate & litigation unless CBDT issues some Circular or Notification to clarify the matter. However, it appears CBDT too doesnot have any valid ground to justify applicability of Sec 206AA to residents of countries having DTAA with India. To justify Sec 206AA, all existing DTAA's need to be re-written.
Please Note : Whatever expressed above, is my personal view. Other Experts can have different views.
28 July 2010
i too agree with Pradeepji.DTAA has overriding provisions over Income tax act if it more favourable to assessee
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