Applicability of Section 206AA of I.T. Act.

This query is : Resolved

CA Sanjay Baheti (Querist)
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28 July 2010 Whether the provisions of section 206AA of I.T. Act can be invoked or applied in case of an employee having estimated salary income exceeds the maximum limit not chargeable to tax (i.e.above Rs. 1,60,000/-) & not having also his PAN No.

That is if He fails to provide his PAN to Employer then the Employer /Deductor is liable to deduct TDS @20% u/s 192 of I.T. Act.

CA. Pradeep Nayak

CA. Pradeep Nayak (Expert)
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28 July 2010 If an employee fails to provide his PAN to the employer, the applicable TDS will be the TDS as per Sec 192 or 20% of the gross salary, whichever is higher.

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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28 July 2010 As per section 139(1) proviso ,income tax return is to be filed if person gross total income not net taxable income , is More than exemption limit means if you have earned 2,50000 in Fy 2009-10 and saved 100000(u/s 80C) and your net taxable income is 250000-100000=150000 Rs even then as per Income tax act,you have to file return as your Gross total income(250000) is more than 160000 .

So as per above rule to check whether Income is more than exemption limit or not for Income Tax return filing purpose ,we should consider income before giving effect to deduction under Chapter IV ie deduction u/s 80C to 80U.

i.e if total salary of employee is before giving effect to deduction under chapter vi i.e deduction u/s 80C to 80 U, then PAN No should be provide by employee to employer for claiming deduction. IF he is not providing PAN No, then also Section206AA will be applicable.

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