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Section 195 , dtaa ,pan not available

sidhigiri (Ipcc) (236 Points)

12 July 2019

Dear Sir/Madam, Can u please let me know what is the solution for income tax tds return (form 27Q), u/s 195, pan error / short deduction or pan error ?? As the foreign party does not have any PAN Nmuber, PANNOTAVBL is quoted and rate of tds quoted in tds return is 10% (as per DTAA), and is so what is the solution for rectifying it ?? Please guide me

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Saket Mishra (367 Points)
Replied 12 July 2019

Read Rule 37BC if you r making payment to NR for-
-Interest
-Royalty
-Fees for technical services or
-on account of trf of capital asset
and such NR is not having pan then provision of sec 206AA shall not apply ie; higher rate of deduction,
accordingly the information mention in Rule 37BC required to be mention in form 27Q, and you not required to deduct tax at higher rate...

Crux- If your r paying the amt to NR specified in rule 37BC and NR not having pan the also you r nt required to deduct tax at higher rate u/s 206AA but the payment to NR is other the in the nature which is mention in the said rule the u required to deduct tax at higher rate...