TDS assessees must quote correct PAN or pay more tax
Tax assessees may have to shell out higher tax at 20 per cent on their non-salary income in case they do not quote their correct Permanent Account Number.delhi Updated: Jul 13, 2009 21:24 IST
Tax assessees may have to shell out higher tax at 20 per cent on their non-salary income in case they do not quote their correct Permanent Account Number(PAN).
“The deductee (person from whose income tax is deducted), shall mandatorily furnish his PAN to the deductor failing which the deductor shall deduct tax at source (TDS) at higher rates,” says the Finance Bill for 2009-10.
The proposal will apply for incomes, other than salary, like interest, rent, royalty etc.
Non-residents would also come under its ambit.
The government proposes to make amendments in the Income tax Act to charge those not quoting PAN at a higher tax rate from April 1 next year.
The bill says the deductor will deduct tax above the rates than prevailing rates or 20 per cent, whichever is higher, in case the TDS assessee does not furnish his PAN.
Tax consultant Deloitte Haskins & Sells partner Neeru Ahuja said in most cases, 20 per cent is higher than the prevailing tax rate of TDS. As such, the tax liability may increase to 20 per cent, if PAN is not quoted correctly.
She said earlier companies were running after vendors to quote correct PAN, but now vendors will have the onus to take the PAN and quote it correctly.