International Taxation

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Querist : Anonymous

Querist : Anonymous (Querist)

01 July 2010 What is the rate of TDS to be deducted for payment made to a non-resident company on fees for technical services having a permanent establishment in India?Please specify the sec. of I.T. Act, rate of TDS and relevant article of any DTAA.

taxindiaconnect

taxindiaconnect (Expert)

01 July 2010 Section 195 of the Act casts an obligation on a resident tax payer making payment to a non resident in respect of an income taxable in India to withhold tax at the rates applicable. The tax is not required to be deducted from the payments made outside India to a NR if the income of NR is not taxable in India. The income of the NR is taxable in India if it satisfies certain conditions. In your query since you have mentioned that the payee has a Permanent Establishment [PE] in India, in that situation one has to see whether the payment made is effectively connected to that PE, if yes, then in that case, the PE is taxable in India as resident in India and TDS as per domestic rates need to be applied. The PE will have to file a return of income here in India and pay the advance / self assessment tax as per the provisions of IT Act 1961.

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Querist : Anonymous

Querist : Anonymous (Querist)

02 July 2010 Please specify the sec. of I.T. Act, rate of TDS and relevant article of any DTAA.