Deduction of TDS for payment made to Non Domestic company

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Sanjiv Kumar Nayar (Querist)

13 January 2010 A company has to make a payment to non Domestic company based in Hong Kong towards the fees for technical Services as such no DTAA exist with Hong Kong. What will be rate of TDS applicable?

Sanjiv Kumar Nayar

Sambu Suresh

Sambu Suresh (Expert)

13 January 2010 Fees for technical services falls under section 115A, You need to deduct @10+ applicable sucharge and Education cess.

Sanjiv Kumar Nayar

Sanjiv Kumar Nayar (Querist)

13 January 2010 Sir, I do not agree, the provision as stated below mention the TDS rate 20% and Surcharge and Education cess has been abolished

B) the amount of income-tax calculated on the income by way of fees for technical services, if any, included in the total income, at the rate of thirty per cent if such fees for technical services are received in pursuance of an agreement made on or before the 31st day of May, 1997 and twenty per cent. where such fees for technical services are received in pursuance of an agreement made after the 31st day of May, 1997; and

CA. Pradeep Nayak

CA. Pradeep Nayak (Expert)

14 January 2010 The applicable rate for witholding tax is as per Sec 115A. It will be 10% + surcharge + E.cess. Sucharge will be applicable if the payment to non resident exceeds Rs. 1Crore during the F.Y. E.Cess is to mandatorily deducted on payment to non residents. Hence the applicable rate will be 10.5575% where surcharge is applicable or 10.3% where surcharge is not applicable.

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