Payment to Non Resident u/s 195
This query is : Resolved
T Vijay Kumar Gupta
(Querist)
15 June 2010
Hi, Can anyone please let me know whether TDS to be deducted @ 20% if PAN of Non-Resident is not available or as per Income Tax Act u/s 195 or as per DTAA with the respective co. with regard to Fees for Technical Services(FTS).
15 June 2010
TDS U/S 195 TO BE DEDUCTED @ HIGHER OF THE FOLLOWING---
1) NORMAL TAX RATE
2) RATE AS PER DTAA
3) 20%
1) NORMAL TAX RATE
2) RATE AS PER DTAA
3) 20%
CA Sanat Pyne
(Expert)
15 June 2010
AGREE
15 June 2010
AGREED WITH SANJAY JI.
As per section 206AA inserted by the Finance (No. 2) Act, 2009, all foreign parties (individuals, partnerships, companies or any other form of entity) receiving payments from Indian companies after 1 April 2010 need to provide their PAN to the Indian party remitting the payment. If the PAN is not provided to the Indian party, then the Indian party is required to deduct tax on the foreign payment at the highest of the following rates:
1. at the rate specified in the Income Tax Act, 1961
2. at the rates in force (rate specified in the Finance Act or under the double tax treaty)
3. at 20%
As per section 206AA inserted by the Finance (No. 2) Act, 2009, all foreign parties (individuals, partnerships, companies or any other form of entity) receiving payments from Indian companies after 1 April 2010 need to provide their PAN to the Indian party remitting the payment. If the PAN is not provided to the Indian party, then the Indian party is required to deduct tax on the foreign payment at the highest of the following rates:
1. at the rate specified in the Income Tax Act, 1961
2. at the rates in force (rate specified in the Finance Act or under the double tax treaty)
3. at 20%
T Vijay Kumar Gupta
(Querist)
15 June 2010
Thanks a lot Sanjay.
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