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Is education cess anf HEC applicable to withholding taxes either under section 195 or DTAA provisions.
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Cess applicable to withholding tax
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If TDS is deducted as per the provisons of section 195 then education cess and HEC is also required to be deducted.
However in case of DTAA provisions tax is to be deducted at the flat rate.
NO CESS TO BE DEDUCTED.
Education Cess or Surcharge are prescribed under I .T Act and not DTAA. Therefore , in case any payment has to suffer withholding tax and it is being paid to a person resident of another country with which there is Double Taxation Avoidance Agreement with India , tax rate applicable will be strictly according to the rate prescribed in DTAA which obviously does not prescribe for education cess or surcharge.
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