Tds on payment of commission to non resident/foreing company

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This query is : Resolved

dheeraj kumar (Querist)

01 March 2013 Sir

Please tell the tds rate for payment of commission to non resident individual/ foreign company

Also tell how tds return under which section it is to be filed.

and foreign national/company does not have any indian pan

commission can also be called consutancy charges/royalty etc.

please reply at the earliest

Thanks & Regards
Dheeraj KUMAR

Nikhil Kaushik

Nikhil Kaushik (Expert)

01 March 2013 depends on the facts of the case, appplicable DTAA and PAN. section applicable is 195. TDS

dheeraj kumar

dheeraj kumar (Querist)

01 March 2013 PLEASE CLEARLY TELL WHAT % OF TDS IS TO BE DEDUCTED AND RECEIVER DOES NOT HAVE ANY PAN

THANKS & REGARDS
DHEERAJ KUMAR

Nikhil Kaushik

Nikhil Kaushik (Expert)

01 March 2013 Dear Dheeraj,

As I said, the rate of TDS shall depend on the following issue:

1. Facts of the case - what sort of commission

2. the applicable double taxation avoidance agreeement

3. Availability of PAN

In absence of PAN, the minimum TDS rate shall be 20%.

MEHUL SHAH

MEHUL SHAH (Expert)

30 March 2013 Previously, there was an exemption Circular for Commission to Non-resident but later on the CIrcular was withdrawn. Hence , the nature of Payment and rate of TDS depends on the facts and circumstances of the case.

If Commission is on account of Business Income for the foreign agent and the foreign agent is working in an independent capacity, no TDS is deductible if the foreign agent does not have any Business connection in India or PE in India.

However if the Commission is in the nature of Market Research, Feasibility Study etc, then it falls under the category of Fees for Technical Services and hence TDS is deductible @ 10 % if there is any favourable DTAA irrespective of any PE in INDIA or not.

In absence of PAN, the rate of deduction if Commission is in the nature of FTS is 20%.

In case of any further query, you can drop a mail at mehul@raseshca.com

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