rushi (article) (125 Points)
05 October 2012I want to remit 2000 Pounds To A Party In UK.
Can Someone Please Enlighten Me If i Am Supposed To Deduct TDS On The Same In India?
Also Is DTAA Applicable In This Case?
If DTAA Is Applicable What Should Be The Percentage Of Deduction Of TDS?
Also If I Deduct TDS As Per DTAA Should The non Availability Of Deductees PAN Attract Futhur Liability?
Ankita CWA Final Student
(Principle Internal Auditor)
(348 Points)
Replied 08 October 2012
Hi Rushi!!!!
First step : you have to see wether the service is provided in india or outside india.
second step: if service is provided in india than TDS will be applicable @ 30% on fees payable as technicale service.
Third step: you have to check out wether DTAA is applicable to U.K.
If your ans is yes than choose higher of the following rate
1- Rate of TDS on Technicale fees applicable in case of foriegn remittance @ 30%
2- Rate applicable under DTAA (i dnt know the exact rate under DTAA for U.K)
PAN card number is irrelavent in this case as on nonavailablility of PAN card Number we deduct TDS @ 20% but here in this case TDS rate its self is 30% i.e. higher than 20%.
You can check out it with taxman also.
I am replying you this after discussing with my Seniour.
Lokesh Rao
(sr associate )
(45 Points)
Replied 17 October 2012
Hi,
1. In the above case TDS is applicable as per Income Tax Act. Due to significant changes that have been brought in the definition of royalty by the finance act, 2012.
2. As per DTTA agreement Between 2 contracting States no need to deduct TDS ( Refer Article 7) Provided no PE in india
3. Summarising (1 & 2) above. DTTA agreement will overrule Income Tax Act i.e Which ever is More Benificial to the Indian Co. can be followed.
4. Obtain Tax Residency cerificate from NR : S. 90 (4) of the Act, as inserted by the Finance Act 2013 w.e.f 1.4.2012 provides that an assessee, not being a resident, to whom an agreement referred to in sub-section (1) of s. 90 applies, shall not be entitled to claim any relief under a Double Taxation Avoidance Agreement unless a certificate, containing such particulars as may be prescribed, of his being a resident in any country outside Indiar
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