DTAA or Income Tax

This query is : Resolved

ATUL U ANAVEKAR (Querist)
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29 November 2010 In my case, my client is to make a payment to German Company as Fees for Techincal Service(FTS). The German Company do not possess a PAN in India.

As per the DTAA between India and Germany, the rate for tax deduction for FTS is 10%.
As per Income Tax, the rate for tax deduction without PAN is 20%.

Which rate is applicable to my case?. 10% or 20%.

Kindly guide

CA.Madhusudan B.P.

CA.Madhusudan B.P. (Expert)
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29 November 2010 Generally DTAA or Income Tax rates which ever is beneficial to assessee may be deducted.

But the Provisions of Sec 206AA, appears to override the provisions of Income Tax Act 1961, including Sec 90/91 i,e. DTAA.

SO WHEN THE VENDOR IN GERMANY DO NOT HAVE PAN IN INDIA, THE APPLICABLE RATES WOULD BE 20%

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