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Tax deduction at source for developing a software in Nepal

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(Querist)
20 November 2024 An Indian startup company has developed a sales related software in Nepal. This startup is tax exempted in India.

As per IT ACT of Nepal , tax of 15% was deducted on payment made.

As per clause 23 of DTAA between Nepal and India, tax credit can be taken for tax deducted in Nepal.

Question here is
1. Tax deduction of 15% is right?
2. Even if the Indian company is an start up tax shall be deducted at the rate of 15%
3. What happen to tax credit as the company in India is tax exempted company.
4. What is the credit taking mechanism if any

Thank you in advance
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
20 November 2024 1 Yes.
2 Yes.
3 Inview of tax exemption no credit can be claimed.
4 Credit can be taken only in case of tax payable.
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