TDS

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sreenivas (Querist)
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26 February 2011 A company in India made arrangements for a class to be conducted in South Africa where a consultancy firm from America will conduct classes in SA. The fees for such will be collected by Indian co in foreign currency through online. Will the payment of consultancy fees to the consultancy firm attract deduction of TDS, if the consultancy firm has no permanent establishment in India?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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26 February 2011 The Finance Act,2010 has substituted explanation to section 9(2) of the Income tax Act,1961 w.r.e.f 01/06/1976 through which the conditions to maintain place of business / rendering of services in India has been done away with, meaning thereby the referred payment attracts the provisions of tax deduction at source.

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sreenivas

sreenivas (Querist)
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26 February 2011 Can you explain me under which section should the tax be deducted and what is the rate of income tax. The consultancy firm do not have PAN. So where should the tax credit go to?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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26 February 2011 Under section 195. Rate of tax is as in part II of the First Schedule to the Finance Act,2010 or rate in DTAA which ever is beneficial. In the absence of PAN section 206AA will attract. For fund remittance compliance of form 15CA and 15CB of the Income tax Rules,1962 is mandatory.

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