Tds on nri

Hi,

1. As per DTTA agreement Between 2 contracting States no need to deduct TDS ( Refer Article 7) Provided no PE in india

2. DTTA agreement will overrule Income Tax Act  i.e Which ever is More Benificial to the Indian Co. can be followed. 

3.  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 India 

Extract of DTAA

ARTICLE 7 - Business profits - 1. The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent, establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enter price may be taxed in the other State but only so much of them as is directly or indirectly attributable to that permanent establishment.

It will attract the provisions of section 195 and TDS will be deducted @ 20% in case of non PAN assesse..