Please suggest TDS implication on payment made to Indian branch of foreign reinsurance company.
Our understanding in respect of TDS implication on payment made to Indian branch of foreign reinsurance company.
1. Since Reinsurance branches are treated non-resident entities for Indian tax purposes and in the absence of lower/nil TDS certificates, all the payments which are received by the reinsurance branches would be subject to withholding at 40% (plus applicable surcharge and education cess). And need to file 15CA & 15CB certificate
2. Where lower TDS certificate is provided u/s 197(1), TDS should be deducted accordingly as per that certificate and No need to file 15CA & 15CB certificates. as the rate is already decided by Income tax officer u/s 197(1), so no need to take opinion from CA about TAX rate.
We have obtain lower TDS certificate u/s 197(1) from that company, Please suggest we have to file 15CA / 15CB certificate for the above payment or not.
Main purpose of 15CA/ 15CB is to decide tax rate. In this question tax rate is already decided by income tax department by issuing lower TDS certificate u/s 197. Then why we have to submit 15CA / 15CB certificate.
Its payment is done in India in Indian currency to branch of foreign reinsurance company which has PE in India.
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