Section 195

we have a contract with one of forgien consultant of Denmark. Contract value is app. 16 crore, at present we have to remitt the consultant rs. 65 lacs. we have entered into agreement on behalf of Indian Railway project which has been declered as national interest project by the Ministry of Railway. railway is giving us app. 21 crore. Now we have to deduct withholding tax as contract is inclusive of all taxes. Pl may specify the rate of withholding tax considering contract os approved by the central government also considering not approved by the government.

 

CA Nilam Prasad

9250215339

Replies (1)

Nilam,

Considering the DTAA between India and Demark, my opnion would be as under :

 

1) If the Demark  based Contrator has PE in India, then it would be a taxable income in India and would be covered under Article 7 of the DTAA

 

2) As per your question, I assume that there is no PE in India, so as per Article 13 of the DTAA, WHT @ 20% is to be deducted in the case.

 

Hope this helps..

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