Withholding tax rate if having pe in india
This query is : Resolved
09 May 2012
The reply in the below mentioned query would be appreciated :
the query is as under
A company registered in Russia and doing some geological survey work for a company registered in India.
The Indian company mentioning that if the Russian company is having PE in India than Withholding tax would be deducted at 40% and if there is no PE in India of Russian company than the rate of withholding tax would be 10%.
Is this possible???
Kindly give the relevant extracts of statues
the query is as under
A company registered in Russia and doing some geological survey work for a company registered in India.
The Indian company mentioning that if the Russian company is having PE in India than Withholding tax would be deducted at 40% and if there is no PE in India of Russian company than the rate of withholding tax would be 10%.
Is this possible???
Kindly give the relevant extracts of statues
Vishal D Shah
(Expert)
10 May 2012
It s correct that if there is Pe rate would be 40%. Also such Pe needs to file their income tax return in India.
CA Mayank Chopra
(Expert)
11 May 2012
Dear Nitesh
1) Any project office in india whose tenure exceeds 180 days is termed as PE & in that case one has to deduct withholding tax which is normally the maximum rate of tax i.e. 40%.
2) If it is not a PE the we have to deduct withholding tax @ 10% - which is known as FTS (Fee for technical services).
3) Further PE has to file the income tax return & get his accounts audited u/s 44AB (if applicable).
4) Do refer DTAA with Russia :
go to link :
https://law.incometaxindia.gov.in/DIT/File_opener.aspx?fn=https://law.incometaxindia.gov.in/Directtaxlaws/cbdt/dta/A1_Russia.htm
1) Any project office in india whose tenure exceeds 180 days is termed as PE & in that case one has to deduct withholding tax which is normally the maximum rate of tax i.e. 40%.
2) If it is not a PE the we have to deduct withholding tax @ 10% - which is known as FTS (Fee for technical services).
3) Further PE has to file the income tax return & get his accounts audited u/s 44AB (if applicable).
4) Do refer DTAA with Russia :
go to link :
https://law.incometaxindia.gov.in/DIT/File_opener.aspx?fn=https://law.incometaxindia.gov.in/Directtaxlaws/cbdt/dta/A1_Russia.htm
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