I have a query would be great to get your feedback on this.
What is the Rate of TDS to be deducted when we make payment to USA, and the payment is towards professional charges. What is the rate of TDS when they mention the PAN number and what would be the rate when they don't have the PAN. Does surcharge and education cess is applicable on the rate, it would be of great help if you can provide us the link where it is mentioned along with the reply.
27 June 2013
Rate of TDS is 10 % in case of DTAA and 20 % + cess if no PAN. and 25 % + cess as per Income tax Act.
IN case of DTAA , no surcharge and cess to be added.
You can benefit the client by consultation through two ways:
1) prove that the professional charges are not in the nature of fees for included services and not in the nature of 'make available' , then no Tds to be deducted.
2) In this case, permanent establishment is not to be seen.
3) if other person is not ready to bear the TDS, then grossing up is to be done. Now there are some judgement through which we can benefit the client while grossing up.
You shall find proper information on net.
If you need further guidance, you can drop a mail at mehul@raseshca.com
Regards CA Mehul Shah 9723459572 Consultant on International taxation
CAclubindia
