Section 206AA of Income Tax Act for AY 2023-24

Section 206AA of Income Tax Act 1961 amended by Finance Act 2022 and Income-tax Rules, 1962. Requirement to furnish Permanent Account Number.

Amended and updated notes on section 206AA of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to Requirement to furnish Permanent Account Number.

Chapter XVII (Sections 190 to 234G) of the Income Tax Act 1961 deals with the provisions related to collection and recovery of tax. Section 206AA of IT Act 1961 provides for Requirement to furnish Permanent Account Number.

Recently, we have discussed in detail section 206A (Furnishing of statement in respect of payment of any income to residents without deduction of tax) of IT Act 1961. Today, we learn the provisions of section 206AA of Income-tax Act 1961. The amended provision of section 206AA is effective for financial year 2022-23 relevant to the assessment year 2023-24.

In this article, you will learn detail of the provisions of section 206AA of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962 as provided by Ministry of Law and Justice, Government of India.

Section-206AA: Requirement to furnish Permanent Account Number

Section 206AA(1) of Income Tax Act

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:

Provided that where the tax is required to be deducted under section 194-O, the provisions of clause (iii) shall apply as if for the words “twenty per cent”, the words “five per cent” had been substituted.

Section 206AA(2) of Income Tax Act

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 206AA(3) of Income Tax Act

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).

Section 206AA(4) of Income Tax Act

No certificate under section 197 shall be granted unless the application made under that section contains the Permanent Account Number of the applicant.

Section 206AA(5) of Income Tax Act

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.

Section 206AA(6) of Income Tax Act

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(7) of Income Tax Act

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
  • (ii) any other payment subject to such conditions as may be prescribed.


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