Tds rate for royalty/technical services

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CA Venkat (Querist)
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20 June 2015 What is the TDS rate for importing technical services. And what is the rate if import company having PE/BC in India.

CMA MALHAR BEHERA

CMA MALHAR BEHERA (Expert)
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20 June 2015 At the rate 10%
As per provision of section 115 A(1) (b) of the Income Tax Act 1961 ,a foreign company includes any income by way of Royalty other then income referred in Sub Section 1 of Section 44AD of income tax act received from a Indian concern ,the income tax payable shall be calculated at the rate of 25 % of the royalty income wef 1-04-2013 .Section 44DA relates to foreign company carrying on business through a P.E .How ever ,the rate of tax will not exceed the rate mentioned in DTAA .
Therefore ,since your client is paying Royalty to a foreign company which is not having a P.E. ,your client is liable to deduct Tax At Source as per provision of Section 195 of the Income Tax Act .

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