Tds on services taken from foreigh party

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This query is : Resolved

arun laxman gaikwad (Querist)

21 April 2014 Dear Sir
We are a garment export house and taking services from from foreign party and wish to make foreign remittance to them?

Is the TDS deduction is compulsory on such payments? if Yes At what rate TDS should be deducted ? What is a limit upto which we should not deduct TDS ? Can foreign party avail TDS credit of the same in India ?

Pls clarify on the above.

Thanks and regards
Arun

Piyush Bothra

Piyush Bothra (Expert)

22 April 2014 Dear Arun,

It differs from payment to payment. Eg. On interest or royalty tds has to be deducted. Whereas on advertising etc no tds to be deducted however banks ask for form 15cb in each cases. Regarding 15cb or any further assistance contact on bothra_piyush@yahoo.com.

Regards
Piyush Bothra CA

Prankur Gupta

Prankur Gupta (Expert)

22 April 2014 Yes TDS is required to be deducted us 195. As per rates given us 115A the TDS is required to be deducted @ 25% or as per DTAA whichever is lower (as amended by fa act 2013). There is no exemption limit. Return is mandatory to be filed. TDS credit can be availed. If foreign party does not provide its PAN TDS shall be deducted at higher the rate of 20% or rates as per FA act

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