28 April 2015
Sir, My company hired a consultant in USA, His monthly retainer or consultation fee is USD 766.00. Please advise whether TDS is applicable or not. If yes, what is the rate?
29 April 2015
IT DEPENDS LAGELY ON NATURE OF SERVICES RENDERED. IF U CAN SHARE DETAILS AN ADEQUATE REPLY CAN BE PROVIDED. GENERALLY SPEKING SINCE SERVICES ARE RENDERED IN USA NO TAX IS DEDUCTIBLE SINCE PAYMENT TO CONSULTANT IS NOT AT ALL CHARGEABLE TO TAX IN INDIA. ANSWER WILL CHANGE IF SERVICES FALL UNDER CATEGORY OF TECHNICAL SERVICES. CA MANOJ GUPTA JODHPUR 09828510543
13 June 2015
1. Primafacily , if the Services comes under the head of Business income, it shall be exempt if there is no business connection . However if the Services come within the ambit of Royalty or Fees for Technical Services, the Rate of tax shall be 10.506 % if it is also subjected to surcharge. 2. However if it does not have PAN, according to Provisions of Section 206AA, the rate of taxation shall stand increased to 20 % + surchrge +Edu cess 3. Benefit of Indo-US DTAA can be taken and even an exemption can be claimed under "Make Available Clause" if applicable provided the non-resident submits Tax Residency Certificate from US Authorities. 4. If non-resident has PAN or TRC and if make available clause is applicable, it is advisable to apply for Nil certificate u/s 195(2) or document all the provisions in Form 15CA and 15CB. 5. Again if the tax is to be borne by the Payer, you need to do grossing up as per the Provision of Section 195A 6. Also Refer to the judgement of Bosh India of Bangalore Tribunal to get a beneficial formula for grossing up. 7. As interpretation of Treaty depends much on the facts of the case, Please treat the above guidelines in a general fashion and if you need a specific opinion, you can mail the scanned copy of Contract and other details on mehul@raseshca.com
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