Dear all,
I have U K based consultant and I received technical services from him on time to time basis in india .
Qs. What type of deduction we made at the time of payment ?
Qs. What is DTAA? Can DTAAapplicable on these transaction ?
Qs. Can TDS applicable on these transaction ?
Dhirendra Singh
Manager- Accounts
In simple words, what we call as TDS for transactions within India, we call it as with holding tax for cross border transactions.
If you want to make payment outside India, then based on the nature of payment withholding tax (TDS) has to be deducted at prescribed rates.
If the rate is say 15%, then you have to deduct 15% from the payments.
If it is agreed that the payment for technical service will be net of tax, then you have to gross up the payment by the with holding tax rate and pay your consultant & the government.
You have to get a certificate from CA certifying that TDS has been made and remitted along with declaration for forex remittance. Your banker will help you with the formats
Your " In agremment , any payment make for technical services in UK ,the tax shall not exceed 20% of the gross amount" is not clear, elaborate
CAclubindia
