Non –Resident (not being a company or a foreign company) not having PAN Number – relaxation from deduction of TDS at higher rate 20% in case of specified payments and if provide specified documents and details (Income Tax (17th Amendment) Rules, 2016 (Notification No. 53/2016, Dated 24th June 2016)).

New rule 37BC inserted regarding relaxation from a deduction of Tax Dedeucted at Source (TDS) at a higher rate of 20% where PAN Number is not available.

This apply in case of a non – resident not being a company or a foreign company .

This rule is applicable in case of following type of payments :-

(i)   Interest

(ii)  Royality

(iii) Fees for technical services and

(iv) Payment on transfer of any capital asset if any

Thus if non –resident (not being a company or a foreign company) who do not have PAN number , the provision of deduction  of TDS at higher rate of 20% (Section 206AA) shall not apply in respect of specified type of payments , if the deductee furnishes the following details and the documents to the deductor.

(i)        Name, e-mail id, contact – number,

(ii)     address in the country or specified territory outside India of which the deductee is a resident;

(iii)     a certificate of his being resident in any country or specified territory outside India from the Government of that country or specified territory if the law of that country or specified territory provides for issuance of such certificate;

(iv)    Tax Identification Number of the deductee in the country or specified territory of his residence and in case no such number is available, then a unique number on the basis of which the deductee is identified by the Government of that country or the specified territory of which he claims to be a resident.

Income Tax (17^th Amendment) Rules, 2016 (Notification No. 53/2016, Dated 24^th June 2016).