TDS u/s 195 :: Interesting

1041 views 3 replies

CA Rajiv Kumar Pandey

Salried

34 Points Posted on 21 April 2011

Dear All,

Fact of The case: -

The Company to whom TDS has to be deducted is an upstream (E&P) Company. This company is takeing the services of Non-resident.

Section 44BB: is applicable being mining upstream industry and accordingly deemed income of 10% will be taken and TDS u/s 195 @ 40% deducted which comes to 4% (100*10%*40%).

Section 44DA: by F.Act 2010 it says that Section 44BB will not be applicable if the same income or expd fall under Section 44DA.

Since Section 44BB applicable to Non-Resident only while 44DA is applicable for non-resident having PE in India. Section 115A coveres all other cases which are not covered for non-resident.

Now in view of changes made by Finance Act'2010 at what rate the TDS will be deducted if a non-resident having PE in India providing services to an Upstream (E&P) Company.

Thanks & best Regards: -

CA. Rajiv Kumar Pandey

+91-9957171572

Replies (3)

CA. Anuj Gupta

Practices in NRI Int.Tax FEMA TP FD

7024 Points Posted on 15 May 2011

As per my limited understanding of facts stted by you , if the sec 44DA comes into picture in yourcase then the TDS shall be liable to be deducted @ 42.23% on NET INCOME of foreign party.

How to calculate net income of 42.23% is a real issue. I suggest that certificate from ITO can be obtained in the present case.

Anuj

0-9810106211

Prasad

Sr. Manager

617 Points Posted on 01 June 2011

40% plus surcharges and cess on the income arising out of India

Prasad

Sr. Manager

617 Points Posted on 01 June 2011

sorry Anuj could not chat with you as had a visitor walking into my office. my intention was to post a tribunal decision case on applicability of PE, and Rajiv could check the relevance to his case, had pressed submit before attaching the file. could not locate the full file, please check the relevance of judgement of Bombay Tribunal in DDIT V Tekmark Global solutions LLC (2010-TII-50-ITAT-MUM-INTL and TEKNISKIL v CIT (1996) 222 ITR 551 AAR case before you conclude that a PE is applicable.