Query regarding dtaa
Can the provision of DTAA override the provision of Section 195 of the Income Tax Act, 1961.
Ex.: if we pay any amount to non resident as a service in relation to technical activity then TDS rate applicable as per section 195 is 10.30% and as per DTAA there is no liability of TDS. So, whether assesses is liable to deduct TDS or not
Replies (1)
Hi,
DTAA is entered into for avoidance of double taxation , it shall over ride the provisions of the act insomuch as the specific provisions in DTAA . For example : If FTS is paid to a NR , and the FTS is as per the definition mentioned in article of DTAA then the rate of tax which is benificial to the assesse will be taken . If the FTS doesnt come in the scope FTS as defined in the article of DTAA then it should not be assumed that FTS is not taxable but the FTS is taxable as per Income Tax Act .
Regards
Karthik V Kulkarni
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