Section 195- TDS

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muhammed anas cv

muhammed anas cv (Querist)
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11 May 2009 Can anybody pls help, what is the rate of tds as per Section 195.

taxindiaconnect

taxindiaconnect (Expert)
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11 May 2009 Dear,

It is a very general query, You need to be more specific. Section 195 of the Act casts an obligation on an resident tax payer making payment to a non resident in respect of an income taxable in India to withhold tax at the rates applicable.

Since as per section 9 the income of a resident by way of royalty will be deemed to accrue and arise in India, the income will be taxable in India.

Section 115 A of Income Tax Act provide a concessional rate of tax @ 10% on non resident earning income by way of royalty in India pursuant to a contract entered on or after 1st June 2005. Need not mention that the rate of tax also needs to be enhanced by the amount of applicable surcharge and the cess.

However As per section 90 of IT Act one can take the benefit of provision of Double taxation Avoidance Agreements ( DTAA) on the payment of royalty if the recipient of the royalty income is a resident of a country with whom India has a DTAA. Currently India has DTAA’s with more then 75 Countries.
Please provide a specific query, I will be more than happy to reply the same.

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