Tds deducted by japan

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This query is : Resolved

shivam malhotra (Querist)

24 June 2015 Japanese entity dedcuted TDS while making payament to my entity ----> Can i book TDS credit and claim refund of the same from Indian income tax ----> But my entity is a loss making entity and we do not pay tax ----> hence can only take refund -----> If i cam only book credit -- any time limit in which credit has to be utilised ---Also Please specify the sections or refund form (ie Return and its part)

Rupesh Jain

Rupesh Jain (Expert)

24 June 2015 WHEN YOU FILE RETURN THEN YOU CAN SEE THE INOCME ON WHICH TDS DEDUCTED BY THE JAPAN VENDOR AND SEE THE DATT AGREEMENT AFTER THAT YOU CAN CLAIM OF TDS DEDCUTED BY THE JAPAN VENDOR

Nikhil Kaushik

Nikhil Kaushik (Expert)

24 June 2015 as you correctly noted, you cannot get refund. Unfortunately, you wont be getting any refund for this credit ever. So just book the tax deducted in Japan as an expense in Indian books.

shivam malhotra

shivam malhotra (Querist)

25 June 2015 Hi Thanks for the early reply. Can you specify the Section/ Circular which states refund cant be taken. As the management is showing the receivable as asset in the books claiming they will take refund . The DTAA with Japan says only of the Credit and not Refund . ( loss making entity --- no certainty of the profits in the near future ) also provide the time limit in which credit should be adjusted.
Issues :
1. Circular/ Section saying no refund can be taken.
2. Time limit for which credit can be availed .

Nikhil Kaushik

Nikhil Kaushik (Expert)

25 June 2015 claim refund from whom? Indian tax authority! You don't get any refund from Indian tax authorities, because you didn't pay any tax in India. The credit of taxes paid outside India is limited to the Indian tax liability on the said income. So if the indian tax liability is Zero, the credit also becomes zero automatically.

shivam malhotra

shivam malhotra (Querist)

26 June 2015 Is it written in the DTAA that credit can be booked only till the amount of Income Tax Liability and if no income liability , book as expense and not be carried forward.

Nikhil Kaushik

Nikhil Kaushik (Expert)

26 June 2015 what is written in article 23?

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