Tds on server renal situated outside india

I am form India

We have taken few dedicated servers on lease basis from a US based company. They have no permanent establishement in India hence no PAN card available in India.
 

Will TDS deduction will still applicable for payment made tru wire transfer to USA?


Please give me detail.

Replies (10)

yes, it may be treated as royalty since you have in your possession servers(access). so withholding is applicable

But how they will get credit as they have no establishment in india. Also without PAN 20% TDS is applicable.

the NR may apply for AAR or the co may apply to local AO for nil / lower deduction of tax. If the payment is going to be regular, it is advisable for the NR company to obtain PAN after ascertaining taxability from ITax
 

But Foreign company do not want to do any formality in India :(


What is option

option:

1.Indian co to apply for nil deduction , if refused(then point no.2)

2.indian co bear the tax burder (grossing up)

Plz explain

 

Indian co to apply for nil deduction

The indian co may apply us 195 to the ITO (request letter) , to make payment to NR without deduction of source. The ITO/AO may either accept or reject the application. In my opinion, tax is deductible, the company may apply indicating no tax payable. If tax is payable, with the order, the company may ask the NR company to apply of PAN in India.

I beg to disagree with the other Expert.

 

It can't be said with surety that TDS shall be needed to be deducted on such payments.

 

It ultimately boils down to the wording and nature of the agreement between the Indian and US party, which shall decide the taxability of said income in India.

 

May be if I have the copy of same i shall be able to help.

 

Anuj

+91-9810106211

femaquery @ gmail.com

 

Thak you Anuj Sir,

I have sent a Docs, which I received from US vendor on your gmail ID

Please check and revert if TDS is still applicable in India


Regards


Neha

@ CA ANUJ GUPTA

 

Sir i am eager to know the response you have suggested to Neha Jain. I want to know the result and your advise to. Kindly also post some details like the total payment to be made, in which currency, etc.

 

I won't demand to post any information which might be objectionable by the real owner of this thread.
 

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