Cess is applicable on Non resident paymeents ..hence yu had short deducted...TDS.

Dear Saroj.

Thank you very much for the reply.

I would like to draw your attention to the definition of tax under DTAA between India & France  which is as below;

DTAA – India and France

CONVENTION BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE FRENCH REPUBLIC FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL

The Government of the Republic of India and Government of the French Republic, desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital;

Have agreed as follows :

ARTICLE 1 - Personal scope - This Convention shall apply to persons who are residents of one or both of the Contracting States.

ARTICLE 2 - Taxes covered - 1. The taxes to which this Convention shall apply are :

            (a)        in India :

                        (i)         the income-tax including any surcharge thereon ;

                        (ii)        the surtax ; and

                        (iii)       the wealth-tax,

            (hereinafter referred to as ‘Indian tax’) ;

“ARTICLE 12 : Royalties and fees for technical services - 1. Royalties and fees for technical services arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

1[2. However, such royalties and fees for technical services may also be taxed in the Contracting State in which they arise and, according to the laws of that State, but if the beneficial owner of the royalties or fees for technical services is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent of the gross amount of the royalties or fees for technical services.]”

The DTAA clearly includes all tax including any surcharge and cess thereon and therefore  there is need to add the same if paid as per DTAA.

And also as per Sec 90(2) of Income-Tax Act, The provisions of Double Taxation Avoidance Agreement prevail over the provision of the Income Tax in the above mentioned cases.

As per the above grounds we have deducted Tax @ 10%.

Kindly suggest your on on the same.

Thanks in advance.

Regards,

Suhas.M

Dear All,

Kindly request you to share your valuable openions regarding the same.

Thanks & Regards,

Suhas.M

DIC Asia Pacific Pte Ltd vs. ADIT (ITAT Kolkata)

The assessee, a Singapore company, offered interest and royalty income to tax at the rate of 15% & 10% as specified in Articles 11 & 12of the India-Singapore DTAA respectively. The AO held that the assessee was also liable to pay surcharge and education cess in addition to the tax. The CIT (A) upheld the assessee’s claim that surcharge was not leviable though he rejected the claim with regard to cess. On further appeal by the assessee, HELD allowing the appeal:

 Articles 11 & 12 of the DTAA provide that the “tax” chargeable in India on interest and royalties cannot exceed 15% and 10% respectively. The expression ‘tax’ is defined in Article 2(1) to include ‘income tax’ and includes ‘surcharge’ thereon. Article 2(2) extends the scope of the ‘tax’ by laying down that it shall also cover “any identical or substantially similar taxes which are imposed by either Contracting State after the date of signature of the present Agreement in addition to, or in place of, the taxes referred to in paragraph 1”. “Cess” was introduced by the Finance Act, 2004 and it is described in s. 2(11) of the Finance Act 2004 as “additional surcharge for purposes of the Union, to be called the “Education Cess on income-tax”. Accordingly, the “education cess” is in the nature of an “additional surcharge” and is covered by Article 2. Accordingly, education cess cannot be levied in respect of the assessee’s tax liability.

Dear Saroj,

Thank you verry much for your reply.

Even after such a clear judgment I am wondering why we are asked to Pay Cess on DTAA rates by the Income Tax Department.

Thank you very much.

Regards,

Suhas.M

TDS CPC Has Gone Mad.

These Notice Will Be Nullified.

Saroj/Suhas

I have a query on the matter at hand. Your foreign service provider is having a PAN in India. Do they have an address or an Office in India. I am not referring to a PE here. will they pay the balance 20% tax to Indian Govt ? Will they file a ITR in India. ? Because Dept will clearly notice that they are having income liable to be taxed @ 30% from 26Q/27Q.

Have you filed 26Q or 27Q. You may discuss about these to my email ID dipmaj @ rediffmail.com

Regards,

Friends,

I am looking forward to your kind responses.

Regards,

Originally posted by : Dipjyoti Majumdar
	Friends, I am looking forward to your kind responses. Regards,

Dear Friends & Experts,

Please provide us a brief idea about filing of IT Return by a Foreign company (without PE in India) having PAN No & TAX has been deducted by indian customers as per DTAA with regard to their income received within India.

Kindly help us with your openions regarding to the Final Tax rate & Tax computation for filing IT return for Income earned in india.

Thanks in advance,

Suhas.M