Tds - when salaried person not quoted pan with employor

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 June 2012 If employee not quoted PAN, then IT provision telling to deduct 20% or Average tax rate(using slab) whichever is higher.

In this 20% deduction was on What??
Is it on Taxable Income or total income or after slab exemption or on what.

Please reply me soon...

CA SAMBHAV JAIN

CA SAMBHAV JAIN (Expert)
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12 June 2012 although I am not absolutely sure about it, but as far as i know. The benefit of the Slab rate won't be available in this case . Thus the tax will be deducted at rate of 20% on the whole income receivable by the employee, irrespective of his/her slab rates.

CA Dileep Surya Kumar

CA Dileep Surya Kumar (Expert)
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12 June 2012 While calculating of Average rate slabs already taken in to account so need not consider slabs for deducting TDS, same 20% case also i.e on total amount.

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CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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12 June 2012 Dear User,

My view is different from above experts, Since attracting section 206AA for non furnishing PAN uses the words "....any sum or income or amount, on which tax is deductible...".

The higher rate of TDS @20% shall be deducted on the amount on which tax is deductible. Since, the tax is not deductible on the amount which is exempt from tax.
Accrordingly, as per interpretation which I personally have concluded, Tax will be deducted @20% or at the rate in the force which ever is higher in both the cases slan exemption need to be given.

Thanks