state the important features of section 206 (AA) of income tax act regarding compulsorily furnishing of pan to income tax deductor?

Section-206AA	Analysis
(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 rates, namely:— (i) at the rate specified in the relevant provision of this Act; or (ii) at the rate or rates in force; or (iii) at the rate of twenty per cent.	1. This section override all other section of Income Tax Act, 2. Any person (resident or non-resident) receive any sum or income on which TDS is deductable, then 3. Such person shall provide PAN No to person responsible to deduct such tax. 4. If he fails then higher of following shall be charged a) Rate as applicable for that part of income under Chapter XVIIB (TDS rate ) b) Rate in force (rate as specified in act) c) 20%
(2) No declaration under sub-section (1) or sub-section (1A) or sub-section (1C) of section 197A shall be valid unless the person furnishes his Permanent Account Number in such declaration.	Section 197(1), (1A) and (1C) talk about providing Form-15G/15H (Nil rate of TDS in case where Individual provide declaration that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be nil Form 15G/15H shall be valid only when deductee provide Valid PAN no.
(3) In case any declaration becomes invalid under sub-section (2), the deductor shall deduct the tax at source in accordance with the provisions of sub-section (1).	If deductee provide invalid PAN then deductor shall deduct TDS at the rate as specified in subsection 1 of section 206AA above
(4) No certificate under section 197 shall be granted unless the application made under that section contains the Permanent Account Number of the applicant.	Section 197 Certificate for deduction at lower rate, this certificate shall be granted by Tax Authority only when PAN No is provided by applicant
(5) The deductee shall furnish his Permanent Account Number to the deductor and 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 or 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 accordingly.	Section 206AA (1) shall be applied in all those cases where person provide invalid PAN No too
(7) The provisions of this section shall not apply to a non-resident, not being a company, or to a foreign company, in respect of—
(i) payment of interest on long-term bonds as referred to in section 194LC; and	There is no requirement to provide PAN No. where income is taxable under section 194LC.
(ii) any other payment subject to such conditions as may be prescribed.	w.e.f 24th June CBDT vide notification no-53/2016 amended Income Tax Rules, 1962 and inserted Rule-37BC -Relaxation from deduction of tax at higher rate under section 206AA and prescribed the conditions
Rule-37BC w.e.f 24th June 2016
(1) In the case of a non-resident, not being a company, or a foreign company (hereafter referred to as ‘the deductee’) and not having permanent account number the provisions of section 206AA shall not apply in respect of payments in the nature of interest, royalty, fees for technical services and payments on transfer of any capital asset, if the deductee furnishes the details and the documents specified in sub-rule (2) to the deductor	1. This rule is applicable only for Non-resident and who does not have PAN number. 2. Person having PAN and not providing same then this Rule is not applicable. 3. Section 206AA shall not apply mean tax shall not be deducted at higher in want of PAN. 4. Although TDS shall be continue to be deducted at the rate specified in the relevant provision of this Act 5. This relaxation is given only for payment in nature of Interest, Royalty, FTS and payment on transfer of Capital asset. 6. Section 206AA shall continue to apply in case of payment in nature of Salary , Pension, Business profit, Dividend , Director Fees, Artistes and sportspersons or any other payment except Interest, Royalty, FTS and payment on transfer of Capital asset Section 206AA shall not apply only when Non-resident provide information as specified in sub-rule-2 under
(2) The deductee referred to in sub-rule (1), shall in respect of payments specified therein, furnish the following details and documents to the deductor, namely :-
(i) name, e-mail id, contact number;	Name, E-mail id, Contact number;
(ii) address in the country or specified territory outside India of which the deductee is a resident;	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	Tax Residency 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	Tax identification Number in country of his residence or unique number on the basis of which the deductee is identified by the Government of that country of which he claims to be a resident Person needs to provide all such information other rule 37BC shall be in effective. The requirement of above information does not substitute Form-10F

Now, what will be requirement of PAN in case of transaction with DTAA or Non-DTAA countries parties?

Here is checklist for you

S.No	Country	Nature of Payment	PAN provide	Tax Rate
1	DTAA	Royalty	No/Yes	In both cases (Yes or No) As per DTAA or IT Act whichever is beneficial to deductee
		Fees for Technical Services (also included fees for included services	No/Yes	In both cases (Yes or No) As per DTAA or IT Act whichever is beneficial to deductee
		Interest	No/Yes	In both cases (Yes or No) As per DTAA or IT Act whichever is beneficial to deductee
		Payment on transfer of Capital asset	No/Yes	In both cases (Yes or No) As per DTAA or IT Act whichever is beneficial to deductee
		Other	Yes	If provides then Rate as per DTAA or IT Act whichever is beneficial to deductee
			No	If not provides then Rate as per section 206AA(1)
2	Non-DTAA	Royalty	No/Yes	In both case (Yes or No) Rate applicable as per IT Act under concern section
		Fees for Technical Services (also included fees for included services	No/Yes	In both case (Yes or No) Rate applicable as per IT Act under concern section
		Interest	No/Yes	In both case (Yes or No) Rate applicable as per IT Act under concern section
		payment on transfer of Capital asset	No/Yes	In both case (Yes or No) Rate applicable as per IT Act under concern section
		Other	Yes	Rate applicable as per IT Act under concern section
			No	If not provides then Rate as per section 206AA(1)