16 January 2011
There is an indian co. who sends its employees to its us subsidary for employment for 3 years. The payment is made by the Indian co. on whose payroll the employees are. The employees have to pay tax of 30% in US and as per the income tax act the employer has to deduct 30% as a tax. I know u can claim the DTAA benefit. But my question is, whether there can be a situation where i dont deduct the 30% tax from his salary as he would be left with only 40% of his income as salary although he would get the tax refund later on. My question is whether is there any way whereby i dont deduct tax at source from the salary of the employee? I KNOW THAT I CAN CLAIM DTAA BENIFIT. BUT IS THERE ANY WAY WHEREBY I DONT HAVE TO DEDUCT TAX UPFRONT FROM THE SALARY WHICH BEING PAID BY THE INDIAN ENTITY
16 January 2011
Yes, their is a way. Just go through the DTAA agreement between in US and India or use th link http://www.allindiantaxes.com/usa%20.php
Show the payment on behalf of Subsidiary. Raise a Debit Note on US subsidiary for making payment, and receive payment from subsidiary. No TDS liability on You
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