28 July 2011
We hired individual consultants in U.K for the financial and other consultancy services. Which they will provide in U.K only and will not cone to India and also they do't have PAN No. Now my qus. are as follows: 1.what is the rate of Tax as per U.K DTAA. 2.Cover under which article in DTAA. 3.Rate of tax as per income tax act. 4.What is the net tax ability.
29 July 2011
Benefit under 'Article 15-Independent personal services' of the DTAA between India-UK may be analyzed.
As per above referred article income of individual (Non-resident) providing “professional services” which includes independent, scientific, literary, artistic, educational or teaching activities as well as the independent activities or physicians, surgeons, lawyers, engineers, architects, dentists and accountants may not taxable in India if a)NR does not have a fixed base in India; or b)NR was not in India for more than 90days during the previous year
Therefore to my understanding the above financial consultancy services also gets covered in article 15.
Finally my views on your queries are as under: 1. TDS Nil as NR has not stayed in India at all(plus assuming no fixed base) 2. Article 15. 3. TDS under I T Act 20% 4. If DTAA benefit availed - tax liablity shall be Nil. Hence no tds needs to be deducted.
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