deduction of tax at source from salary

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dhruv (Querist)

16 January 2011 There is an indian co. who sends its employees to its us subsidary for employment for 3 years. The payment is made by the Indian co. on whose payroll the employees are. The employees have to pay tax of 30% in US and as per the income tax act the employer has to deduct 30% as a tax. I know u can claim the DTAA benefit. But my question is, whether there can be a situation where i dont deduct the 30% tax from his salary as he would be left with only 40% of his income as salary although he would get the tax refund later on. My question is whether is there any way whereby i dont deduct tax at source from the salary of the employee? I KNOW THAT I CAN CLAIM DTAA BENIFIT. BUT IS THERE ANY WAY WHEREBY I DONT HAVE TO DEDUCT TAX UPFRONT FROM THE SALARY WHICH BEING PAID BY THE INDIAN ENTITY

CA LOKESH KASAT, FCA, M.Com

CA LOKESH KASAT, FCA, M.Com (Expert)

16 January 2011 Yes, their is a way.
Just go through the DTAA agreement between in US and India or use th link
https://www.allindiantaxes.com/usa%20.php

Show the payment on behalf of Subsidiary.
Raise a Debit Note on US subsidiary for making payment, and receive payment from subsidiary.
No TDS liability on You

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