payment of interest by Indian subsidiary company to foreign patent company.....is TDs is to be deducted by Indian subsidiary company.... if yes, then at which rate.????
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Quick Summary
This discussion clarifies the rules for Indian subsidiary companies paying interest to their foreign parent companies. It confirms that Tax Deducted at Source (TDS) must be deducted by the Indian subsidiary. The applicable TDS rate is generally 20%, plus applicable surcharge and health & education cess, as per Section 195 of the Income Tax Act. Given the complexity, seeking professional advice is recommended.
Based on raw data given by you, Sec 195 shall apply & TDS rate is 20%, excluding SC (as applicable) & 4% HEC, This matter could be intricate & professional advice is advisable.