ADT WITH SRILANKA

This query is : Resolved

suman (Querist)
Follow

29 January 2011 MY COMPANY IS PAYING " SOFTWARE IMPLEMENTATION FEE" TO A SRILANKAN COMPANY.AS PER SEC 195 RATE OF TDS IS 41.2%. BUT THERE IS A CONDITION REGARDING DEDUCTION OF TDS i.e.- higher of rate as mentioned u/s 195 or rates specified in "ADT" AGREEMENT which ever is higher.

Pls tell me rate of tds as mentioned in ADT with srilanka.

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
Follow

30 January 2011 Although there is no FTS clause in ADT of India-Sri-lanka yet the Department may not accept this contention. You can deduct TDS u/s 115A @ 10.5575% if the Sri lankan Co. does not have a PE in India.

Also as per sec. 195 rate of 41.3% is only applicable if the Srilankan Company has a PE in India.

Anuj
9810106211