Tds on interest other than interest on security u/s 195

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This query is : Resolved

Taher (Querist)

04 January 2014 A company has deducted TDS u/s 194A @20.6% to the person who is non residence, who has also furnished PAN details to company.
Is it required to deducted TDS @20.6% instead of 10%????

MEHUL SHAH

MEHUL SHAH (Expert)

06 January 2014 The payer need to deduct tax at the rate beneficial to the payee i.e. Tax rate as per Income Tax Act or Tax rate as per the relevant Double Treaty Avoidance Agreement.

So here you need to mention the following details to get the correct advise.

1) Nature of Payment

2) Country of residence of non-resident

3) Is the non-resident having any PE in India

4) Has he submitted any Tax Residency certificate.

Do reply with the following details

or you can draft a detailed mail at my email id : mehul@raseshca.com

Vishal D Shah

Vishal D Shah (Expert)

06 January 2014 Ideally if payment is to non resident, TDs needs to be deducted u/s 195. So that's one mistake. Secondly as said by Mr Mehul you also need to obtain Form 10F from the payee if you take treaty benefit.

Taher

Taher (Querist)

07 January 2014 First sorry for Late Reply,

1) Nature of payment- 94A, company has deducted TDS on Interest other thn interest on security

2)Person is Non residence but he has valid Indian PAN.

3)Yes, All transaction in Indian Rupee.

4)I dont know about tax residency certificate.

Dear Sir, what my confusion is, Is company required to deduct TDS u/s 195 or company's point of view is right i.e. TDS u/s 94A??

i will very thankful for all experts.

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