Question relating tds

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Bhavyesh Mehta (Querist)

11 February 2014 An assessee engaged in the business of Diamond & It has made one transaction in the nature of Royalty with party which situated Israel country. We have deduct TDS @ 10% as per the law & DTAA agreement also existed. As per the TDS 's demand notice, they mention deduct TDS @ 10.30%.
What will be the correct rate for deducting TDS transaction in the nature of Royalty Reply as soon as possible

Nikhil Kaushik

Nikhil Kaushik (Expert)

11 February 2014 as per DTAA rate is 10% and you have rightly deducted so. edu cess wont apply to DTAA rates.

Bhavyesh Mehta

Bhavyesh Mehta (Querist)

17 February 2014 In this case , What does the reply given of notice issued by Income Tax Department? What will be the next procedure for this problem? Is it necessary to given reply to income tax department?

Nikhil Kaushik

Nikhil Kaushik (Expert)

17 February 2014 it is necessary to reply. respond by giving reference to relevant case laws. read this https://taxindia.pz10.com/2013/05/if-dtaa-caps-tax-rate-education-cess-is.html

https://www.kalelawoffice.com/education-cess-additional-surcharge-included-tax-dtaa-if-dtaa-caps-rate-tax-payable-cess-payable-foreign-assessee/

https://taxguru.in/income-tax-case-laws/dtaa-caps-tax-rate-education-cess-payable-foreign-assessee.html

https://corporatelawreporter.com/2013/04/20/if-dtaa-is-silent-no-obligation-to-deduct-surcharge-education-cess/

https://taxworry.com/education-cess-dtaa-rate-applicable/

Vishal D Shah

Vishal D Shah (Expert)

28 May 2014 Dear Mr Nikhil,
I have similar query where my client has deducted TDS @10% under DTAA, got short deduction notice as per Act. The foreign party didnt have PAN in India but they has submitted TRC and 10F as was required u/s 90 to avail DTAA benefit.
What possible action could be taken by him? Whether he should appeal against the demand order with CIT(A) or ??
Not to mention that he had rightly filled TDS statement with opting DTAA rate.
Further your views on provision of local law under Sec 206AA overriding DTAA enetered between 2 countries

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