As you are ware that income tax is required to be deducted at source under provisions outline in chapter XVII of Income tax Act ,1961 . More precisely part "B" deals with various situation where in tax is deducted at source at specified rate . However in case of recipient of income is not in a position to provide his Permanent Account Number (PAN) , Tax will be deducted at source by referring provision as laid down under section 206AA of Income Tax Act . The section is read as :
After section 206A of the
Income-tax Act, the following section shall be inserted with
effect from the 1st day of April, 2010, namely:—
"206AA. Requirement to furnish
Permanent Account Number.—(1)
Notwithstanding anything contained in any other provisions of this Act, any person
entitled to receive any sum or income or amount, on which tax is deductible under
Chapter XVIIB (hereafter referred to as deductee) shall furnish his Permanent
Account Number to the person responsible for deducting such tax (hereafter referred
to as deductor), failing which tax shall be deducted at the higher of the following
(i) at the rate specified in the relevant provision of this Act;
(ii) at the rate or rates in force; or
(iii) at the rate of twenty per cent.
(2) No declaration under sub-section (1) or sub-section (1A) or sub-section
section 197A shall be valid unless the person furnishes his Permanent Account
Number in such declaration.
(3) In case any declaration becomes invalid under sub-section (2), the
deduct the tax at source in accordance with the provisions of sub-section (1).
(4) No certificate under section 197 shall be granted unless the application
under that section contains the Permanent Account Number of the applicant.
(5) The deductee shall furnish his Permanent Account Number to the deductor
both shall indicate the same in all the correspondence, bills, vouchers and other
documents which are sent to each other.
(6) Where the Permanent Account Number provided to the deductor is invalid
does not belong to the deductee, it shall be deemed that the deductee has not
furnished his Permanent Account Number to the deductor and the provisions of sub-section (1) shall apply
The responsibility of deduction of tax at source is fastened on payer (Deductor) . Payer should examined highest rate
) at the rate specified in the relevant provision of this Act;
) at the rate or rates in force; or (iii
) at the
rate of twenty per cent.
Therefore deductor should first find out nature of Income as may be received by recipient . Thereafter he checks whether any specific rate of tax leviable as a special rate e.g. section 115BBA for Non resident sportman /entertainer etc.@ 20% ,115BBF Royalty income based on Patent @10%. Thereafter he checks rate in force as prescribed under section 2(37A) of I T Act . To verify rate in force one needs to go to Schedule -1 to find out regular tax rate and TDS both . On completion of this exercise deductor needs to apply 20% in comparative table .
After completing exercise , the moot question arises that whether this rate is further increased by Surcharge and Education cess . It was held in case of Computer Sciences Corporation India (p) Ltd Vs ITO  77 Taxamann.com 306 (Del) that no further surcharge or EC will be added while computing tax liability . It was further observed by tribunal that whenever legislature intended to levy any additional tax over and above head rate , specific provisions are embedded in sections . It was further illustrated and referred section 2(29C) -Maximum Marginal Rate , Section 115JB MAT etc.
Thus it is clear that when recipient is not PAN holder and when section 206AA is applied , only tax rate arrived under above referred process will hold valid for chargeability of tax and no further surcharge or EC be added.
We are just about to
celebrate Diwali Festival. In recent time celebration has become a phenomenon.
We may get joy out of celebration but not happiness. Today, one does not have
time to look into his own self (Spiritually).The distance between two places
in the world is shortening but the distance between two human beings is ever increasing.
The obvious reason is, life has become too much materialistic. Life can be
lived, driven by desires or knowledge. If life is lived based on desires, it is
easy and which provides instant gratification. When one tests the living life
based on luxury and comforts, he does not dare to venture in to a living life
based on knowledge (Gyana). A lifestyle
based on desire gives quick and visible result but in the process human values
are eroded whereas the life style based on Gyana
may appear to be difficult however, at the end of the journey it ensures
abundant happiness which is a part of eternal satisfaction as against more
tangible joy derived with materialistic approach.
Life is a Festival bestowed by Almighty to Jiva. One should live life with human
values. Human values are the virtues
that guide us to take into account the human element when one interacts with
other human beings. The legacy of how to inculcate human values is found in
our Shastra. In today’s fast moving
life, we as parents struggling hard to have time to interact even with our
children on daily or weekly basis. We are overlooking our parents. We hardly
interact with our neighbours. Mostly human touch is lost in all our day today human activities. We are
so much concentrated on our goal of becoming financially wealthier by ignoring
the wealth of human relationship.
We are missing one point that we are human beings and we
need human beings to liveon this earth.
There is hardly anything that is not found out in our rich legacy of Shastra to discover new ways and means for human value
appreciation. The common ground of all
Religions is human value. The human values are embedded in customs ,
festivals or traditions. It is important to follow such traditions and rituals and
celebrate the festivals with the spirit and intent for which it has been
introduced in our society. There is no advocacy
to follow Religion blindly but desirable to have a look at the customs and tradition with a scientific
India has preserved human values by introducing festivals,
traditions and customs. As we know, Smriti
(memory) has limited life with reference to place and time, while process of
practicing values through other modes known as Shruti, is timeless. India has rich legacy of Shruti . The Ramayana,
Mahabharat , Gitaand many more other
books are filled up with full of experience and wisdom for human beings. All
those are torch bearer for the society.
Practicing Human Values are social, ethical and spiritual
process in the mankind. The most of the parts of n world need to have more
experience in practicing human values. They are appreciating human values based on their social requirements. Unless the
society respects each human being, human value chain can not be tied up. For example a marriage ceremony is an
acceptance of natural need of human being, prevalent with utmost dignity, for many years in India. The relationship between
two families is at paramount with dignified human values. Other examples of
human value appreciation are respecting elders, teachers, parents and helping needy person in society.
The reality is, Western world has been practicing Dharma (to
act), Arth (Creation of money) and Kaam (desire). All activities are
self-centered. They are far ahead in
following this path with full of enthusiasm but they know less about MOKSH
(Spiritual eternity or happiness within soul ). We follow them till they travel
and stop there. We need to recall our rich legacy of practicing human values.
We need to see whose are we rather than who are we. Money has limited
purchasing power. Let us respect relationship and follow the call of
conscience. Some retrospection is suggested by posing question to ourselves
whether birth has taken as per our choice, whether death is as per our expected
time, whether the result of our efforts is as per our expectation and …….Have a
faith in Supreme Power .
Query : WHAT IS THE MEANING OF NON RESIDENT INDIAN (NRI) UNDER FEMA
Ans: As per
recent changes in the month of March ,2018 ,the definition of NRI changed . NRI
means a person resident outside India ,who is citizen of India . Earlier who is
foreign citizen but Indian origin was also considered as NRI . In view of
changing in the definition ,now Indian origin but holding foreign citizenship
has to secured Overseas Citizen of India Card to qualify as NRI . By securing
OCI card under section 7(A) of Citizen Act 1955 , Foreign Citizen of Indian
origin becomes Non Resident Indian . Earlier without holding OCI card merely
showing documents of roots of Indian origin were considered as sufficient proof
to establish as NRI . This compels foreign citizen of Indian Origin to secured
OCI card and claim eligibility for permissible investment under NRI category .
Merely holding Indian Visa is not sufficient to qualify as NRI.