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Tds on nri

manish kumar (C.A) (99 Points)

27 October 2012

We are paying amount to outside india law practioner, one belongs to professional fee and other part is fee payments to trademark office of the coutry

Law practioner bill (UK)

A private limited, New delhi

Fee to trademark office $ 400

Other fee $ 250

TOTAL $ 650

For Law parctioners (UK)

Authorised

The UK client is not having PAN in india , how we will deduct tax on this invoice

Please help me

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2 Replies

Lokesh Rao (sr associate ) (45 Points)
Replied 27 October 2012

Hi,

1. As per DTTA agreement Between 2 contracting States no need to deduct TDS ( Refer Article 7) Provided no PE in india

2. DTTA agreement will overrule Income Tax Act i.e Which ever is More Benificial to the Indian Co. can be followed.

3. Obtain Tax Residency cerificate from NR : S. 90 (4) of the Act, as inserted by the Finance Act 2013 w.e.f 1.4.2012 provides that an assessee, not being a resident, to whom an agreement referred to in sub-section (1) of s. 90 applies, shall not be entitled to claim any relief under a Double Taxation Avoidance Agreement unless a certificate, containing such particulars as may be prescribed, of his being a resident in any country outside India

Extract of DTAA

ARTICLE 7 - Business profits - 1. The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent, establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enter price may be taxed in the other State but only so much of them as is directly or indirectly attributable to that permanent establishment.