DTAA

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shrikant velekar (Querist)

12 June 2011 I have a client whose income is Professional Fees as actor.
He have 95% of his income in Indian Currency.Where the TDS is deducted by our goverment rate.
Beside 5% income is from UK based production house which is transfer his account in INR via electronic transfer in terms of INR.
London based production house is deducted 20% tax in GBP as per the DTAA agreement with our Govt.
And they issue the concern Foreign Entertainers Tax Dectuction Certificate for year ended.
This transaction is not frequent.Once in year it will take place.
For e.g.(In INR).Prof Fees is Rs.100 FEU@20% i.e.Rs.20 Net amount is Rs.80 transfer his bank account.
What is accounting entry and tax treatment in our books of account?
Is there any exemtion for tax & income?

Please guide and advice me.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

12 June 2011 Deduction U/s 80RR is available to the individual in respect of his income from foreign sources.
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In this case Income +TDS (FETDS) has to be considered as Income in the hand of the assessee. Tax will be computed as if it is an Indian Income and Tax Relief will be given to the extent of lower of the actual amount of FETDS or Average Tax Rate.

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As in the case of TDS, a separate TDS Account is opened. Likewise in case of FETDS you may open FETDS A/c and pass Journal Entries in the similar manner as you are doing for Indian Income.

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