Tds Rate of NR for payment exceeds400000

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CA rahul grover (Querist)

05 May 2008 What is Tds Rate.if i have received professional service from Non Resident(Dubai) which payment exceeds 400000

Amit Sharma

Amit Sharma (Expert)

05 May 2008 Special rates of TDS apply on payments to non-residents taking into account the provisions of the Act and the applicable tax treaty.

In your case you would have to refer to DTAA between India and Dubai. According to me the rate applicable for profeesional fees is 15% whereas the Professional fees is 10% in India.

The conclusion would be that since you are in India and you will bear the burden of all the taxes and pay then the amount exclusive of these taxes, you will be falling in the boundary of India , hence you should follow Income Tax Act will says professional fees to be paid @ 10% exclusive of Surcharge and Cess.

R.V.RAO

R.V.RAO (Expert)

05 May 2008 UNDER SEC 195-CLAUSE - h -fees for tech serv. IF in pursuance of an agreement ,then 10% TDS APPLICABLE AND EDU.CESS OF 3%ON TAX.(RECIPIENT IS AN INDIVIDUAL AND PAYMNET BELOW RS 10 LAKHS).
FOR ABOVE RS. 10 LAKHS PAYMENTS ADD SURCHARGE @10% PLUS EDU.CESS@3%
IF THE RECIPIENT IS NON DOMESTIC CO.,THEN TDS APPLICABLE @10%PLUS SURCHARGE 2.5%AND THEN ADD EDU. CESS @3% ON TAXES.
IF THE SERV. ARE NOT TECH SERVICES THEN 30% TDS AND EDU.CESS@3% APPLICABLE.
ADD SURCHARGE@10%FOR ABOVE RS. 10 LAKHS PAYMENT.
IF RECIPIENT IS A DOMESTIC CO.,THEN
TDS @40% PLUS 2.5% SURCHARGE AND ADD EDU.CESS@3% ON TAXES.
TDS RATES AT ABOVE OR ADT(AVOIDANCE ON DOUBLE TAXATION TREATY)RATES ( SEC. 90 )WHICHEVER IS LOWER.
R.V.RAO

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