What is section 206AA of Income Tax Act?

What is section 206AA of Income Tax Act?

Section 206AA of the Indian Income-tax Act, 1961 (the Act) provides that if PAN is not furnished by the payee, the withholding tax rate would be 20% or the rate in force, whichever is higher. The mandatory requirement to furnish PAN poses an undue hindrance for non-residents.

How do I check my 206AA compliance?

Step 1: Select PAN Search tab under Compliance Check for Section 206AB & 206CCA functionality. Step 2: Enter valid PAN & captcha code and click Search. Step 3: Click the PDF icon to download the details in PDF format. Following Output result will be displayed upon entering a valid PAN & captcha code.

Is 206AA applicable to non-resident?

Scope of Section 206AA 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.

Does 206AA override DTAA?

The DTAA provides for a rate of 10% whereas as per the provisions of Section 206AA of the Act, the rate of tax deduction at source is 20%. The plea of the revenue was that section 206AA starts with a non-obstante clause and therefore it overrides all other provisions of the Act including 90(2), 115A and 139A.

How do I check my income tax compliance?

Responding to a Notice for Related Information

  1. Log in to your account by clicking on and entering the login ID and password.
  2. On successfully logging in, there is a compliance tab on the dashboard.
  3. The taxpayer can choose one of the following options from the drop-down:

How do I find my compliance portal?

Step 1: Login to the e-filing portal by using the URL Step 2: Click on the ‘Compliance Portal’ link available in “My Account” or “Compliance” tab. Step 3: Click on e-verification tab Step 4: Click on View button against the case Step 5: Select and submit response. 2.

What is TDS section 206AB?

Section 206AB provides a tax deduction at source (TDS) at rates higher than those prescribed in the Act while making payments or collections to those who have not filed their income tax return.

What is form 206AB?

A new section 206AB is introduced in the Finance Act 2021 for deduction of tax at source at higher rates to identify non-filers of Income Tax Returns. These defaulters will be identified and higher Tax Deducted at Source ( New Section 194Q of Income Tax Act w.e.f. 1st July, 2021.

What are the implications of section 206aa of the Tax Act?

When the PAN is furnished, payments made to the recipient will be taxed at the rate of TDS mentioned under the different TDS provisions of the Income Tax Act. In case a recipient does not furnish PAN, would suffer TDS at the higher rates as mentioned in Section 206AA of the Income Tax Act.

What is the purpose of sections 206ab and 206cca?

Sections 206AB & 206CCA were inserted in the Income Tax Act, 1961 vide the Finance Act, 2021 -Section 206AB: Special provision for deduction of tax at source (TDS) for non-filers of ITR. -Section 206CCA: Special provision for collection of tax at source (TCS) for non-filers of ITR.

Can a self declaration be made under section 206ab?

Self-declaration: The Act does not provide for any such declaration but as a good practice a deductee/collectee can furnish a declaration on the letterhead of the Company along with a copy of ITR acknowledgments of last 2 F.Ys. to the concerned tax deductor/collector about the non-applicability of Section 206AB/206CCA upon them.

How is section 206ab introduced in TDs provision?

Therefore, a section 206AB is introduced in the TDS provision, thus, at the time of deducting the TDS, a consideration to the provisions of Section 206AB by the deductor of TDS are mandatory. Here, we have listed the provisions as follows which shall be applicable from 01 July 2021: A. On whom higher TDS rates under section 206AB are applicable?