A new provision relating to tax deduction at source (TDS) will come into effect from April 1, 2010 whereby all transactions where the deductee’s permanent account number (PAN) is not available will be charged at a higher, prescribed rate of 20%, the Central Board of Direct Taxes (CBDT) has stated in a notification. The new provision applies to non-residents as well.
“In order that there is no dispute regarding quoting/non-quoting of PAN or accuracy thereof, the law requires all deductees and deductors to quote PAN of deductees in all correspondences, bills, vouchers and other documents sent to each other,” the CBDT said in a release. “All deductors are, therefore, advised to intimate their deductees to obtain and furnish their PAN so as to avoid TDS at a higher rate.”
TDS rates traditionally vary depending on the transactions and the latest notification is intended to encourage compliance with regard to TDS.
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