TDS Rate-Very Urgent

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 September 2010 Dear Experts,

What is the TDS rate for the interest payment for the loan received from NRI

Thanks in Advance

CA SMR

CA SMR (Expert)

08 September 2010 • The contract / nature of the payment will determine the rate of TDS recovery. This may be as per Income tax Act or as per DTAA (Double Taxation Avoidance Agreement).First we check the applicability of DTAA. If the rate as per DTAA is more than the Income Tax Rate, then we deduct tax as per IT Rate.

a. The withholding tax rate under the ADT agreement can be determined from the web site link https://law.incometaxindia.gov.in/DIT/intWitholdingTax.aspx#. Go to the web site https://www.incometaxindia.gov.in/, select “International Taxation”,click on “Witholding Tax” followed by withholding tax rate. Else directly click on https://law.incometaxindia.gov.in/DIT/File_opener.aspx?fn=https://law.incometaxindia.gov.in/Directtaxlaws/dtrr2005/R10.htm.
b. In order to know the rate as per income tax act, one can refer the website https://www.incometaxindia.gov.in/, select “International Taxation”, click on “Non-Residents” / “Foreign Companies” whichever is applicable followed by “General and Special Rates”.
c. In order to know the clause/article under DTAA applicable, one can refer to the web site https://law.incometaxindia.gov.in/DIT/intDtaa.aspx and click on the country to which the remittance is applicable.

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