Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: Central Excise rule to resale the machines to a new company :: due date for vat payment :: ACCOUNTING STANDARD :: VAT Audit :: cpt :: ARTICLES ON INPUT TAX CREDIT IN VAT :: list of goods taxed at 4% :: TDS :: TAX RATES - GOODS TAXABLE @ 4% :: VAT RATES :: empanelment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: articles on VAT and GST in India :: ACCOUNTING STANDARDS :: form 3cd
« News Headlines »
 ICAI to organise two-day international conference in Hyderabad
 Here's how to calculate tax payable on your capital gains
 Income Tax calculations for the financial year 2016-17
 CPE Events 17 October - 22 October 2016
 High Court raps I-T Department for wrong tax demand
  CBDT signs 5 advance pricing pacts with Indian taxpayers
 Finance ministry warns tax officials of action against GST protest
 Big changes for small units under GST
 Parliament’s winter session to begin on November 16 to expedite GST rollout
 Income-tax (27th Amendment) Rules, 2016 - 92/2016
 Announcement - Clarifications in Respect of MEF 2016-17

Be ready to pay 20% tax from tomorrow
March, 31st 2010

Get ready to shell out more tax up front on any income received if you are unable to provide your permanent account number from April 1. The tax deducted at source, or TDS, on payments could be as high as 20% for those not quoting PAN against the regular rate of 2%-10%.

The Budget 2009-10 had made it mandatory for residents and non-residents to quote this number or face a higher rate of withholding tax. It comes into effect from Thursday, April 1.

The idea behind the rule is to encourage more people to obtain PAN, a 10-digit alphanumeric tax payer identification number, and thereby become visible to tax authorities. The tax base of the country is a mere 3.3 crore because of massive underreporting of incomes and large-scale exemptions.

Quoting of PAN will allow income tax authorities to establish an audit trail and catch tax evaders. Some experts feel the measure is excessive. This would put unnecessary burden on senior citizens who do not have a tax liability, said Kishan Malhotra, Executive Director, KPMG.

Senior citizens could just file Form 15H in absence of tax liability and become eligible for exemption from TDS. If they do not furnish a PAN they will have to face a TDS rate of 20%.

Other Indian residents not falling within the tax bracket will also have to obtain a PAN and quote it where required. Tax deducted at source can be adjusted against a taxpayers actual tax liability.

But in the case where there is no tax liability it has to be claimed back by filing returns.

The new rule comes with a severe penalty if not followed. Any failure to deduct taxes at appropriate rates will result in disallowance of expenditure for the one making payment, recovery of tax from him, and levy of interest and penalty. Interestingly, the total number of PAN issued in the country is in excess of 8 crore. Income Tax department issues the permanent account number in partnership with UTITSL and NSDL.

With this provision coming into effect even non-residents, having just one-off transaction with Indian parties will have to obtain PAN, failing which they will suffer a much higher withholding tax on their income.

Typically, payments by residents to non-residents in the nature of royalties or fees for technical services attract withholding tax at rate of 10.56% under the Income Tax Act or at 10% under certain tax treaties in the absence of a permanent establishment or a fixed place of work in India.

Similarly, interest payments to non-residents attract withholding tax at a rate lower than 20% under certain tax treaties. The PAN is required to be quoted in document pertaining relating to sale of property, sale or purchase of a motor vehicle requiring registration other than two-wheelers. Most of the banking transactions require PAN to be quoted.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Development Software Programming Software Engineering Custom Software Development Requirement Based Software Development Software Solutions Software Serv

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions