TDS ON PAYMENT OF INTEREST TO FOREIGN PARENT COMPANY

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.