Tds u/s 195

TDS 1213 views 9 replies

A Indian Company has entered into agreement with the a Foreign company with respect to AMC of its machineries.I would like to Know whether TDS has to be deducted on payments made abroad ro the Foreign company

Replies (9)

Yes, you need to deduct the TDS U/s. 195.

Yes section 195 is very much applicable. If you can re post the facts of the case in a more detailed manner I would be able to give more comments

yes, TDS u/s195 will be applicable.

Yes TDS is applicable at the rate given in section 195 and DTA Act , which ever is less.

Section 195 of the Act casts an obligation on a resident tax payer making payment to a non resident in respect of an income taxable in India to withhold tax at the rates applicable. The tax is not required to be deducted from the payments made outside India to a NR if the income of NR is not taxable in India. The income of the NR is taxable in India if it satisfies certain conditions.

 

As per section 5 the income of NR should have been either be received or deemed to be received in India or should be accrue or deemed to accrue in India for such income to be taxable in India.

 

As per section 9 the income of a resident by way of fees for service rendered would be treated as technical fees and will be deemed to accrue and arise in India, the income will be taxable in India with in the meaning of deeming provision under section 9 of the Act as the explanation 2 to section 9 (1) (vii)

                                                                                                                                            

However As per section 90 of IT Act one can take the benefit of provision of Double taxation Avoidance Agreements ( DTAA) Currently India has DTAA’s with more then 75 Countries.

 

Since in your query it is not clear that what is the country of residence of non resident company also not clearly mentioned, in the absence of such information it is difficult to give any concrete advice, however from the language body of the query it seems that apparently TDS is applicable under section 195 @ 10% if PAN is available. If no PAN available the tax rate would be 20%.

Yea TDS is Compulsory u/s 195.

Wat is meaning of Book Entry on T.D.S.

Book entry means, tds has to be done at the time of incurring the expense, it is not necessary that payment has to be made

I agree with Taxindiaconnect.


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