Tds

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BASKARAN (Querist)
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16 October 2013 We have borrowed funds from Foreign bank which is incorporated in Germany under External Commercial Borrowing with RBI approval route. We have to remit interest every month in a year. Can any one inform us what is the TDS for remittance of interest for ECB. If there is any DTAA with Germany what is the DTAA TDS rate.
We deduct the TDS 10% because our foreign banker have a PAN this is right????
Kindly clarify
Thanks in advance

Nikhil Kaushik

Nikhil Kaushik (Expert)
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17 October 2013 Yes you are correct in deducting @ 10%. Refer Article 11 of the India - Germany DTAA

"ARTICLE 11 - Interest - 1. Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

2. However, such interest may also be taxed in Contracting State in which it arises and according to the laws of that State, but if the recipient is the beneficial owner of the interest the tax so charged shall not exceed 10 per cent of the gross amount of the interest."

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