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Adt tax deduction

suman (Auditor ) (388 Points)

16 December 2011

WE HAVE PAID TECHNICAL FEES TO A SRILASNKAN COMANY. TAX WAS DEDUCT @ 10% BY US ON THE BASIS OF RATES AS MENTIONED IN ADT AGREEMENT WITH RESPECTIVE CONTRY. NOW THEY ARE DEMANDING TDS CERTIFICATE . BUT THEY DON'T HAVE PAN NO IN INDIA . SO ACCORDING TO MY KNOWLEDGE TDS CERTIFICATE WILL NOT SERVE THEIR ANY PURPOSE ?

PLS GIVE YOUR RESPECTIVE VIEWS ON THE SAME

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8 Replies

valji (Accounts manager-MBA) (2150 Points)
Replied 16 December 2011

prepare TDS certificate manullay with TDS acknowledgennt no

but first of all whether you file form 27Q under sec 195

suman (Auditor ) (388 Points)
Replied 16 December 2011

THANK U SIR

BUT MY QUESTION TO U IS THIS CERTIFICATE GO TO SERVE THERE PURPOSE AT ALL.

Manika Venkata Siva Prasad (IPCC-student) (84 Points)
Replied 16 December 2011

tnx vajli, but let me know how can they deduct tax without pan no, and on which pan no they will pay amount to the IT dept,

vishnupriya (CA Final) (1418 Points)
Replied 16 December 2011

I think they are demanding TDS Certificate for proof.

It is also possible that, Srilankan Taxation rules on this type of receipts may require TDS certificate to get some tax exemptions....

vishnupriya (CA Final) (1418 Points)
Replied 16 December 2011

@ Siva Prasad

Foreign companies, who engages in financial tranasactions & liable for tax, should also get a PAN irrespective of fact whether they have permanent establishment or not in India.

Please read this article for more clarity

https://taxguru.in/income-tax/tds-rate-us-206aa-if-no-pan-on-payment-to-non-residents.html

CA Kiran Sutrave (CA) (428 Points)
Replied 16 December 2011

Dear Suman

Since the Sri Lankan Company does not have a PAN is India, Section 206AA of the Income Tax Act, 1961 is applicable (Introduced with effect from April 01, 2004) according to which TDS is to be deducted at the higher of the following rates: -

1. at the rate specified in the relevant provision of this Act; or

2. at the rate or rates in force; or

3. at the rate of twenty per cent.

In your case, TDS was supposed to be deducted at 20.6% (including surcharge) under Section 195 and Return is to be filed wherein it is mentioned that PAN is not available.

Once the return is filed with the NSDL after 15 days you can issue Form 16A from the NSDL website itself.

The Sri Lankan Company will utilise the credit available as per the tax laws of Sri Lanka. Indian Company need not bother.