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      Question

      If a deductee fails to furnish their Permanent Account

      Number (PAN) to the person responsible for deducting tax at source, tax will be deducted at which of the following rates?
      A At the rate specified in the relevant provision of the Act or at 10%, whichever is higher Correct Answer Incorrect Answer
      B At the rate specified in the relevant provision of the Act or at 20%, whichever is higher Correct Answer Incorrect Answer
      C At a flat rate of 30% invariably Correct Answer Incorrect Answer
      D No TDS will be deducted until the PAN is provided Correct Answer Incorrect Answer
      E At a flat rate of 5% across all categories Correct Answer Incorrect Answer

      Solution

      Section 206AA mandates that if the recipient of taxable income does not furnish their PAN to the deductor, TDS must be deducted at the higher of the following rates: the rate specified in the Act, the rate in force, or a punishing floor rate of 20%.

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