Tds on non-resident
This query is : Resolved
Jitendra M.Gurejani
(Querist)
02 September 2011
Dear Sirs/Madam,
My query is if the assessee is non-resident company and if he want to deduct TDS under DTAA so my question is whether surcharge is applicable to that assessee if the Turnover proceeds exceeds Rs 1 Crore., or else or only flat rate of TDS is applicable.
Thanks & Regards
My query is if the assessee is non-resident company and if he want to deduct TDS under DTAA so my question is whether surcharge is applicable to that assessee if the Turnover proceeds exceeds Rs 1 Crore., or else or only flat rate of TDS is applicable.
Thanks & Regards
Jitendra M.Gurejani
(Querist)
15 September 2011
Please reply the above query
27 July 2025
Good question!
Here’s how **TDS and surcharge apply to non-resident companies under DTAA**:
---
### 1. **TDS Rate on Non-Resident under DTAA**
* When a non-resident company receives income from India (like interest, royalty, fees for technical services), **TDS is deducted at rates specified in the relevant Double Taxation Avoidance Agreement (DTAA)** between India and the country of residence of the non-resident.
* These rates are usually **lower than the normal domestic rates**.
---
### 2. **Is Surcharge applicable on Non-Residents under DTAA?**
* **No surcharge or cess is applicable on TDS deducted under DTAA rates.**
* The TDS rate under DTAA is a **final withholding rate** and typically applies on a **flat basis**, **without surcharge or cess**.
* This means, even if the turnover or income exceeds ₹1 crore or any threshold, **surcharge does not apply** on DTAA rates of TDS.
---
### 3. **If DTAA does not apply**
* If DTAA benefits are **not claimed** or applicable, then the **domestic TDS rates** apply.
* In such cases, **surcharge and cess** are added as per domestic law if the income exceeds the specified limits.
---
### **Summary:**
| Situation | TDS Rate | Surcharge Applicable? |
| -------------------------------------- | ------------------------- | ----------------------------- |
| Non-resident claiming DTAA benefit | As per DTAA (flat rate) | **No surcharge/cess** |
| Non-resident NOT claiming DTAA benefit | Domestic rate + surcharge | Yes, if income exceeds limits |
---
If you want, I can help you find the exact DTAA rate for a specific country or provide sample calculations. Just let me know!
Here’s how **TDS and surcharge apply to non-resident companies under DTAA**:
---
### 1. **TDS Rate on Non-Resident under DTAA**
* When a non-resident company receives income from India (like interest, royalty, fees for technical services), **TDS is deducted at rates specified in the relevant Double Taxation Avoidance Agreement (DTAA)** between India and the country of residence of the non-resident.
* These rates are usually **lower than the normal domestic rates**.
---
### 2. **Is Surcharge applicable on Non-Residents under DTAA?**
* **No surcharge or cess is applicable on TDS deducted under DTAA rates.**
* The TDS rate under DTAA is a **final withholding rate** and typically applies on a **flat basis**, **without surcharge or cess**.
* This means, even if the turnover or income exceeds ₹1 crore or any threshold, **surcharge does not apply** on DTAA rates of TDS.
---
### 3. **If DTAA does not apply**
* If DTAA benefits are **not claimed** or applicable, then the **domestic TDS rates** apply.
* In such cases, **surcharge and cess** are added as per domestic law if the income exceeds the specified limits.
---
### **Summary:**
| Situation | TDS Rate | Surcharge Applicable? |
| -------------------------------------- | ------------------------- | ----------------------------- |
| Non-resident claiming DTAA benefit | As per DTAA (flat rate) | **No surcharge/cess** |
| Non-resident NOT claiming DTAA benefit | Domestic rate + surcharge | Yes, if income exceeds limits |
---
If you want, I can help you find the exact DTAA rate for a specific country or provide sample calculations. Just let me know!
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