Section 206AA – Higher TDS Rate for Non-Furnishing of PAN

Tax Glossary Definition

Section 206AA – Higher TDS Rate for Non-Furnishing of PAN

According to this provision, if a taxpayer (deductee) does not provide their Permanent Account Number (PAN) to the deductor, the tax must be deducted at a higher rate as a compliance measure. This rule helps ensure traceability of transactions and proper reporting of taxable income.

Example: For instance, if PAN details are not shared, the applicable TDS rate increases to 20% instead of the usual 10%

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