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whether section 206AA will override DTAA?

Started by pawansingla, February 07, 2014, 11:24:09 PM

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.Our client a company has paid Royalty to a company in singapore.Singapore company does not have pan no in india.

2.Our client had deducted tax at 10% as per DTAA agreement.

3.Ao TDS circle has issued notice that TDS should be 20%.

4.Kindly advice.



I think section 206AA contains the words "notwithstanding anything contained in any other provisions of this Act". Hence it has got the overriding effect on section 90 as well..

Further please refer the following case law:

Bosch Limited [TS-904-ITAT-2012(Bangalore)].


Dear All,

First we need to check if the recipient was liable to tax in India and is he required to take a PAN in India? Eventhough sec. 206AA starts with a Non-obstante clause, it does refer to only those transactions on which tax is deductible as per chapter XVII-B.


Moreover, Income-tax Act, 1961 cannot override DTAA. Its essential to have Tax Residency Certificate in place. You may find the attached writeup useful in this case.