Foreign remittance - tds

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Ramanatha shetty (Querist)

09 August 2011 Here is one client purchasing/downloading Data software online from foreign company,foreign company do not have any permanent establishment in India. now the purchase Indian enterprise is remitting money. is there any need to deduct TDS at 20%. or if the remittance for purchase of other material what is the treatment. need an opinion of the expert. thanks in advance.

Rabindra Kumar Sahu

Rabindra Kumar Sahu (Expert)

10 August 2011 In my view TDS may not be deducted for a purchase of software.However in which section of IT act mentioned TDS 20% as you have mentioned in your query?????

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Ramanatha shetty

Ramanatha shetty (Querist)

10 August 2011 Under section 195(1), if the PAN is not available for the Foreign company in India, then TDS on such payments need to be deducted at 20%, higher rate

CA. Anuj Gupta

CA. Anuj Gupta (Expert)

10 August 2011 1. Make sure that custom intimation is made 2. if the software is used for the own purpose of downloader and
3. the software is not taken on hire then the requirement of TDS shall not be there.

Also 20% is provided under sec 206AA and not 195(1).

Anuj
+91-9810106211
femaquery@gmail.com

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Ramanatha shetty

Ramanatha shetty (Querist)

23 October 2011 Thank you lot..

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