Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

TDS on salary/wage payment without PAN

balakrishna R (manager finance) (43 Points)

16 March 2011

Dear Sirs,

Can u pls clarify urgently

whether tds need to be deducted or not in case for payment of avg monthly salary/wage say Rs.8000/- to 10000/- made to an employee or worker whose monthly avg salary/wage is much below the initial exempted limit of Rs.160000/- and has no PAN . Is TDS at higher rate U/s 206AA ie 20% is applicable?.

Thanks N Regards,

Balakrishna R

Reply
Follow
Share

5 Replies

Pankaj Arora (Learner) (3134 Points)
Replied 16 March 2011

If salary is below than exemption limit than no need to deduct tds on salary…

Upgrade to CAclubindia Pro. Subscribe Now!

Ram Thakkar (CA final ) (126 Points)
Replied 16 March 2011

hey no need to deduct tds if inome below exemption limit nd if income higher than Rs.160000 than deduct and if PAN is not available than section 206AA applicable........

1 Like

balakrishna R (manager finance) (43 Points)
Replied 16 March 2011

thanks for your response, but pls refer an aricle in CA journal march.2011 issue in regard "to requirement to furnish PAN U/s 206AA of IT act.1961 "- not able to conclude which is correct.

Originally posted by : Ram Thakkar
	hey no need to deduct tds if inome below exemption limit nd if income higher than Rs.160000 than deduct and if PAN is not available than section 206AA applicable........

Pankaj Arora (Learner) (3134 Points)
Replied 16 March 2011

Employee whose salary is more than exemption limit is mandatory to give PAN to employer otherwise its not mandatory….

Neeta Pradeep Pawar (Sr.Accounts Officer) (22 Points)
Replied 26 March 2011

no tds if salary income below exemption limit. Income above exemption limit,(upto rs.5 lakhs) 20% is applicable only on excess of income above exemption limit as the incidence of tax u/s. 192 is only on income above exemption. 20% rate has be compared with rates in force. sec206AA does require to calculate average rate. Rate can be compared only if the base to which they are applied is same.If we apply 20% on income inclusive of exemption, we land in situation where marginal tax payers like pensioners (senior citizens) will be penalised more than other high income tax payers. In case of persons with high income there will not be any penalty as tds amount as per rate in force will be more than applying 20% on income inclusive of exemption limit. This can not be the intention of legislture.