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TDS on payment to foreign company

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Lila

Job

463 Points Posted on 28 February 2021

We are deducting TDS on payment made to a foreign company. How do we file TDS return as company does not have PAN in India. What PAN is to be mentioned in TDS return?

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Quick Summary

This discussion addresses the challenge of filing TDS returns when making payments to a foreign company that does not possess an Indian PAN. It clarifies that Section 206AA mandates PAN submission for both residents and non-residents receiving taxable income in India. The core question remains: what PAN should be entered in the TDS return for a deductee without an Indian PAN, as the standard 20% TDS rate is not the primary concern here.

CA. Sourav Sarkar

Chartered Accountant

16188 Points Posted on 28 February 2021

Section 206AA was introduced from FY 2010-11. Section 206AA requires every taxpayer who receives taxable income to furnish their PAN to the payer of such income. This applies to both the resident as well as non-resident recipients. The payments in case of residents would include salary, rent, professional receipts, contractual receipts and so on. In the case of non-resident, these would include all receipts that are taxable in India.

If PAN is not available then 20% tds will be deducted