TDS @ 20 % without PAN as well as in case of Invalid PAN ?

Taranjit Singh (Chartered Accountant) (6108 Points)

22 June 2010  

This clause is applicable to all type of deductee .The Maximum TDS rate is applicable in following case

  1. if pan is not provided by the deductee .[section 206AA(1)]
  2. If pan provided by the the deductee is invalid.[section 206AA(6) read with 206AA(1)]



Now ,the question is here ,how can deductor can check correctness of the pan ? There is no straight way to verify the pan ,But I have Listed few thing hereunder which may be helpful for deductor .
  1. First Thing the deductor should  do is that demand photocopies of the pan card from regular service providers , agents etc.
  2. If photocopies has not been provided by the deductee and Just pan (number) is provided then verify the structure of pan
    • Pan must be of 10 digits .
    • First five digit and tenth digit must be alphabet(A_Z)
    • Sixth to Ninth digit must be Number (0,1,2,3,4,5,6,7,8,9)
    • Forth digit of Pan represent Assessee status,and if a Partnership firm provides pan with forth digit as P or C then it means the pan is incorrect 
      • C — Company
      • P — Person
      • H — Hindu Undivided Family (HUF)
      • F — Firm
      • A — Association of Persons (AOP)
      • T — AOP (Trust)
      • B — Body of Individuals (BOI)
      • L — Local Authority
      • J — Artificial Juridical Person
      • G — Govt
    • Fifth Digit of Pan represent Surname as per Data filled in the application in case of Individual assessees and in other case first name .