Liability to deduct tax at source.
195. (1) Any person responsible for making a specified payment shall, at the time of payment, deduct income-tax therefrom at the appropriate rate.
(2) The specified payment referred to in sub-section (1), if the deductee is a resident, shall be the payment of the nature specified in column (2) of the Third Schedule and the appropriate rate, in respect of such specified payment, shall be the rate specified in the corresponding entry in column (3) of the said Schedule.
(3) The specified payment referred to in sub-section (1), if the deductee is a nonresident, shall be the payment of the nature specified in column (2) of the Fourth Schedule and the appropriate rate, in respect of such specified payment, shall be the rate specified in the corresponding entry in column (3) of the said Schedule.
(4) Without prejudice to sub-section (3), where a rate in respect of such specified payment has been provided in the relevant agreement entered into, or adopted by, the Central Government under section 291, then appropriate rate referred to in sub-section (1) shall be the rate specified in the corresponding entry in column (3) of the Fourth Schedule or the rate provided in such agreement whichever is lower.
(5) Notwithstanding anything in this Code, the appropriate rate referred to in subsection (1) shall, in a case where the deductee has failed to furnish his permanent account number to the deductor (except where the deductee is not required to obtain permanent account number under section 292), be the higher of following rates, namely:—
(a) twenty per cent.; and
(b) the rate specified in sub-sections (2), (3) or sub-section (4), as the case may be.
