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Applicability of Cess & Surcharge on TDS u/s. 195

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This query is : Resolved

priyanka karandikar (Querist)
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16 February 2023 Hello,

We have deducted TDS @10% as per DTAA - as mentioned in 15CA form.
Its for technical service.
There is demand raised by TRACES that it should be 10% plus Cess = 10.40%

If TDS is deducted for payment made to Non resident company and if the rate is as per DTAA - then Cess @4% is applicable ? please guide. If no, then is there any specific option to be chosen for that while filing the return??

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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16 February 2023 Rates as per DTAA includes all surcharges, addition on account of education cess not sustainable. DTAA would prevail over the Indian Income Tax Act .
OSRAM India Pvt. Ltd. Vs DCIT (ITAT Delhi) Income Tax (Appeal) No. 4052 of 2015
Also refer: https://indiankanoon.org/docfragment/12821902/?formInput=DTAA%20surcharge

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