Payment to Non Resident u/s 195

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T Vijay Kumar Gupta (Querist)
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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).

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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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%

CA Sanat Pyne

CA Sanat Pyne (Expert)
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15 June 2010 AGREE

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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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%

T Vijay Kumar Gupta

T Vijay Kumar Gupta (Querist)
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15 June 2010 Thanks a lot Sanjay.

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